Laissez-faire

Proposal 1, on the ballot this November, would “allow for the medical use of marijuana under state law for patients with certain ‘debilitating medical conditions’ including cancer, glaucoma, HIV/AIDS, Crohn’s disease, epilepsy, hepatitis C, and multiple sclerosis, among others.”

A yes vote on this proposal is a vote for health freedom and individual liberty in general. No one has the right to come between a doctor and their patient when making treatment decisions. Various studies reveal the effectiveness of medical marijuana as a treatment for the symptoms of many debilitating diseases. Evidence also clearly suggest that is it vastly safer than legally prescribed and FDA approved drugs that you rarely hear anyone complain about, until countless people have died. Whether or not marijuana is a safe and effective treatment should be up to an individual and their doctor, not the government.

The scare tactics against marijuana are mind boggling and unfounded. Alcohol is more dangerous, but regarded as an acceptable recreational drug by most Americans.

Furthermore, this proposal is a step in direction of freeing the doctor-patient relationship from the irrational grip of the government.

Barack Obama continues to berate Republicans for playing a key role in causing the “credit crisis” by deregulating the mortgage lenders and related institutions. However, if you go back and dig up the truth, you’ll find that the democrats were more concerned with securing mortgages for people who would, under normal market conditions, not qualify. Democrats after all, are largely responsible for the Community Reinvestment Act, which pressured many banks into subprime lending. Many Republicans were genuinely concerned with the actions being taken by Fannie Mae and Freddie Mac.

Though I believe they are a problem in themselves, so long as Government Sponsored Enterprises such as Fannie and Freddie exist, they will need to be regulated. Unlike private enterprise, which is constrained (regulated) by the accountability and pressure of market forces, GSEs operate recklessly with the backing of the government.

This is not to absolve Republican lawmakers. They, along with the Democrats, are missing the larger underlying problem: Monetary policy; specifically, the Federal Reserve’s loosening of credit through means such as artificial lowering of the interest rates. This is what made it possible for the overabundance of lending into the housing market. It was this policy, combined with legislation aimed at lending to unqualified borrowers, that fueled the boom. In a free market, interest rates would not have been that low, and lending would have been tightened. Without the credit introduced into the banking system by the fed, there would have been no air to inflate the bubble.

Absent the CRA and other interventionist economic legislation (subsidized housing), the “easy credit” would have likely found its way into another sector of the economy; perhaps even a sector where Republicans favor subsidies. Neither McCain nor Obama will touch this crucial issue; for lack of understanding or its political inexpediency, I’m not completely sure. Instead, they are both reacting in a way that will only prolong and deepen the economic downturn, as are the majority of our elected officials.

The policy of the Bush administration has been abominable, and I believe they are making all the wrong moves in response to the economic problems; but it is important to realize that this began during the Clinton administration with Alan Greenspan in charge of the Federal Reserve. Clinton was was fortunate to be in office during the inflation of the bubble.

Here is a cartoon depiction of the government swindle, now euphemistically referred to as a “rescue package.”

I’m also reminded of a joke I once heard:
“What do you get when you cross a pit bull with a collie?
A dog that runs for help … after he bites your leg off.”

The only difference in the case of the bailout, is that the government isn’t really helping us despite any good intentions our representatives(I use the term loosely…perhaps incorrectly) may have.

Yes it IS, among other things, a bailout. By enabling the treasury to purchase illiquid assets from banks who issued mortgages to unqualified borrowers,* congress is preventing the natural correction of the inflated housing market. Those banks who would otherwise experience losses due to poor business practices, will have their bad debt taken off their books at the above market prices, at the expense of the taxpayers.

We may experience a limited span of false economic security, but the damage to the economy has already been done, and there is no amount of tinkering that will allow us to escape the inevitable adjustment. Real estate values remain higher than true market values, and we continue to consume at a much higher rate than we produce; with a significant percentage of the consumption financed by debt.

Inflation, will likely become a serious problem when banks begin to loosen credit, as their reserves are built up with newly issued currency from the Federal Reserve’s purchase of Treasury Bills. For now, I suppose we can enjoy the artificial “high” induced by the magic wand of socialism. We’ll worry about the side effects later.

* I am aware that the Community Reinvestment Act obligated many banks to lend to unqualified borrowers. That combined with the artificially low interest rates set by Greenspan and Bernanke, set into motion the mis-allocation of capital that led to the bubble. But this is not to say that many of these banks were not acting recklessly.

well, no one is laughing, but in this clip from December of 2006 there is only one man (Peter Schiff), who had enough foresight and understanding to correctly predict the economic trouble that was ahead. Listen to the others laugh and joke at what he had to say.

While everyone was preoccupied with talk of the $700 billion bailout of the financial sector, the House passed a $25 billion bailout for the US auto industry. Our political leaders are sending a clear message: If your company is large enough, it doesn’t matter how disastrously it’s being run, we’ll take money — forcibly — from taxpayers to help you maintain your failing enterprise.

Collectivism — the idea that the rights of individuals should be sacrificed for the erroneous benefit of the common good — is destroying this country. We are quickly adopting Soviet-style central planning; and if things don’t change (and, no, I’m not talking about the change that Obama and McCain claim to offer) soon, the fate of The United States is sure to echo that of the Soviet Empire.

What’s worse than a “Bridge to Nowhere,” that actually goes somewhere, albeit a small island that does not justify a bridge at the expense of taxpayers? How about a road to nowhere that actually leads to the non-existent “Bridge to Nowhere?”

Sarah “Thanks but no thanks” Palin has a lot of nerve touting her opposition to the bridge, when not only did she actually support it in the beginning (until it became politically unfeasible), and end up taking the federal money; she also allowed the construction of the $26 million road leading to where the bridge was going to be built.

I believe that is the epitome of a “pork barrel project” as McCain would call it, if it had occurred under Democratic leadership.

…The only person in Washington who has the slightest clue what’s really going on. The man who has seen this coming for many years now, and warned everyone about it. It’s unfortunate that it takes an event like this to open people’s eyes to the soundness of Austrian economics, and the disaster that is brought about by Keynesian economics under which our government currently operates.

UPDATE: Another one this morning.

Walter Williams is one of the few voices of reason with regard to the economic policy of the US. This short column touches on a few points including the myth that this economic crisis is a market failure that will be remedied by more regulation as McCain and Obama both call for.

Many politicians and pundits claim that the credit crunch and high mortgage foreclosure rate is an example of market failure and want government to step in to bail out creditors and borrowers at the expense of taxpayers who prudently managed their affairs. These financial problems are not market failures but government failure. The Community Reinvestment Act of 1977 is a federal law that intimidated lenders into offering credit throughout their entire market and discouraged them from restricting their credit services to low-risk markets, a practice sometimes called redlining. The Federal Reserve Bank, keeping interest rates artificially low, gave buyers and builders incentive to buy and build, thereby producing the housing bubble. Lenders were willing to make creative interest-only loans, often high-risk “no doc” and “liar loans,” in order to allow people to buy more housing than they could afford. Of course, with the expectation that housing prices will continue to rise, it was no problem for lenders and borrowers but housing prices began to fall, leaving some people with negative home equity and banks in trouble.

He also makes some other great points: Congress, and Congress alone, is constitutionally authorized to raise or lower taxes; and Congress cannot create jobs, despite what politicians claim.

“If Fannie and Freddie were not underwritten by the federal government, investors would demand Fannie and Freddie provide assurance that they follow accepted management and accounting practices…. By transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market. This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.”

-Ron Paul, circa 2003 (Quoted in Lew Rockwell’s column: The Social Imperative of Sound Money)

Now we see one of the largest steps towards socialism that this country has experienced since the New Deal which significantly worsened, and delayed the correction of the great depression and gave birth to these two leviathan arms of the state; Fannie and Freddie. It’s no wonder that banks are dropping like flies.

It’s ironic (well, not really anymore) that republicans are instituting policies that align them with those whom they claim to be so fervently opposed to: Socialists. Bush uses different terminology, but it’s the same failed policy.

Another example of why government does not provide the best solution to environmental concerns. The Interior Department is responsible for managing federally owned land. These employees, like so many other government employees tempted by lobbyists and special interests, were anything but responsible.

Radley Balko at Reason made an interesting observation: The Bush administration is currently pursuing a military strategy that McCain, Romney, and others harshly criticized Obama for suggesting.

Will McCain now condemn the Bush administration’s decision to go into Pakistan? Or was this idea only naive ten months ago? Was it only naive because it came from Obama?

Ron Paul held a conference earlier today where he essentially endorsed third party candidates and encouraged everyone to not vote for either of the two establishment candidates. His opening statement was a very profound argument for doing so. He was accompanied by Ralph Nader, Cynthia McKinney, and Chuck Baldwin, all of whom signed a pledge agreeing on four critical issues that are ignored by Obama and McCain.

If you are seeking a president who will keep us involved (and expand our role) in foreign wars; continue to bail out corporations and large banking and lending institutions at the expense of taxpayers; further erode civil liberties by means of spying, warrantless wiretapping, torture, etc.; and refuse to address the issue of monetary policy resulting in the debasing of our currency and ultimately widening the gap between the rich and poor; then you might as well flip a coin and vote for either Barack Obama or John McCain.

Ron Paul’s statement to the National Press Club

Candidate Statements:

* Ralph Nader
* Chuck Baldwin
* Cynthia McKinney

Sign the open debates petition to help candidates offering REAL change, get a chance to participate in national debates.

What is happening? Why are all the mainstream media outlets talking about the figure of speech used by Obama? Why isn’t it clear to people what Obama was talking about when he said “you can put lipstick on a pig, but its still a pig.” Are Americans really that stupid? I understand the McCain campaign has a motive to make such idiotic accusations, but do the American people really need to listen to hours of analysis about the use of a figure of speech? I hope not.