Simon Heffer, in the Torygraph, is perhaps one of the least worst writers in the UK MSM, and generally provokes me into making some kind of comment to his thought pieces. Today was no exception. He wrote an interesting article, which you can find here.
This was my comment:
Posted by Jack Maturin on October 1, 2008 8:11 AM
In "Communist Manifesto", Karl Marx lays out ten aims necessary to build a socialist world. The fifth aim is the "centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly."
In other words, exactly what Gordon Brown is doing with Northern Rock and Bradford and Bingley, and exactly what George Bush intends to do with his creation of a "Bad Bank" for mortgage-backed securities.
This bank will be funded by the pillage of the hapless American taxpayer to get political elites around the world off the hook of their own naked greed for power and expropriated wealth.
Contrary to what the Keynesian pump-prime socialists and the Chicago monetarist socialists believe, the cause of the 1929 Wall Street crash was the creation of the Federal Reserve in 1913 and its then constant printing of money out of thin air for 16 years, fooling everyone into making endless malinvestments during the 1920s.
The subsequent cause of the 1930s depression was the stupidity of presidents Hoover and Roosevelt in then failing to allow prices of goods and labour to drop, to clear and correct the crash, first by banning corrective pricing processes, such as shorting, and later by the instigation of endless government interventions to prop up market prices pumped out by the Fed's expansionary bubble. Sound familiar?
The cause of our current malaise was the action of Alan Greenspan and the Federal Reserve, in 2001, in their endless printing of money out of thin air following 9/11, by setting interest rates to 1%. This was much lower than the prevailing inflation rate and thus encouraged bankers to malinvest by lending this ongoing deluge of "free" paper money to house owners, thus pushing out another massive speculative price bubble in the world housing market.
We are experiencing the inevitable bursting of this paper bubble, instigated by incompetent government; the worst thing we can allow is this same incompetent government to manage the consequences. If we do allow these stupid people to once again prevent prices from dropping and clearing, through myopic interventions such as the ban on shorting, last seen in 1929, we will have another depression on our hands. These economic numskulls are attempting to use the same play book as 1929; we will therefore get the same result if we fail to stop them.
By propping up bank share prices and house prices, and intervening to prevent the "natural" tendency of these prices to drop, now that Greenspan's bubble has burst, they are sleepwalking the rest of us into disaster.
The initial failure of the bail-out was thus a marvellous piece of news, and the best thing that government can do in a situation like this. That is, absolutely nothing.
We will suffer some short-term pain, yes, especially the masters of the universe like Goldman Sachs and JP Morgan. However, let them pay for their foolishness and let them get blown away by the process of the free market. If government does nothing, it will all be over quickly.
Alas, by hook or by crook the governmental power elites of the world will get this stupid measure through in the next few days, thus ushering us in another long-term and far more painful depression, by saving their government-bond-buying friends in Wall Street and sticking it to the rest of us in the process.
We will be paying for this largesse for decades. Expecting to retire at sixty with a decent nest egg? Think again. They are now trying to ensure that you will be working till you drop, unless you are within the magic circle of government and its friends.
In putting guns to people's heads and pushing these terrible measures through, Hank Paulson, Ben Bernanke, George Bush, and Gordon Brown will be doing the glorious work of Karl Marx, as directed by their master in "Communist Manifesto", by furthering the advancement of world socialism.
Welcome to the Road to Serfdom.
Fortunately, to cheer me up, there are some rather discerning folks out there who appreciate such raw Austrianism:
Jack Maturin 8.11
Good post Jack. It is also suggested in some quarters that Fannie Mae and Freddie Mac etc, were leant upon by that pinko disaster Clinton on 'racist grounds'! Aparently, their protests that mortgages were aplied to people, whatever their colour, gender, religeon etc on the same basis, finances and perceived ability to repay, wasn't good enough! It is alleged that they were told to increase their mortgage exposure to ethnic groups, if they had to take milk tokens as income to do so, so be it. If they didn't get ethnics onto their bookds however, they'd be prosecuted under federal laws and do time in Federal Pens!
Posted by Mike on October 1, 2008 11:32 AM
Though I like this comment even more!
Jack Maturin 08:11
Posted by davey on October 1, 2008 9:39 AM
Obviously a splendidly discerning fellow.