 |
Category: News and Politics
There is an excellent article about the real cause of our current financial mess here:
http://myslu.stlawu.edu/~shorwitz/open_letter.htm
But what, then, is the cure for this mess?
Someone asked me, isn't this bailout necessary no matter how bad it is? It's like we have a sick patient who's also about to immediately die from heart failure. Don't we need emergency treatment to keep the patient alive, regardless of other considerations? Here is my answer...
The only way we should be convinced to support a bailout would be if we knew that, after the bailout "emergency treatment", things would actually change so the problem wouldn't happen again (i.e., we cure the long-term disease) and we actually start improving the health of the system. But that's not going to happen. I am 100% sure that's not going to happen. The change that is needed is so far removed from everyone's accepted, ingrained doctrine, that when someone talks about it (like Ron Paul), he or she is laughed at and called a crackpot and nutcase.
The only way we can stop having extreme boom and bust cycles, giant bubbles and bursting bubbles as in the mortgage market, is to restore sanity to our monetary system. We need to stop creating US dollars out of thin air and stop artificially manipulating interest rates. The organization that does both those things is a private corporation, the Federal Reserve. The reason the government gave the Fed the power to issue our money (and without it being backed by anything of true value) is so that it can be used to fund our massive deficit spending -- to fund all those programs everyone wants but doesn't want to actually pay for, and to fund our wars, and to fund our empire building. We can't get rid of the Fed and restore stability to our monetary system, therefore, until we change our view of what our government should be.
We also need to stop supporting government policies that create advantages for particular sectors of the economy in order to achieve well-intentioned social goals. These things include the Community Reinvestment Act that forces mortgage companies to give loans (subprime mortgages) to millions of unqualified homebuyers that are high risk. No matter what our good intentions, we can't so significantly distort the economy without it eventually snapping back (just like we can't manipulate the ecological system of nature without creating unintended harm elsewhere in the environment).
Without drastically changing our view of what we want from government, we are not going to fix the underlying causes of our illness. We can transfer a trillion dollars of our savings and retirement funds (and our children's money through the effects of inflation) to the bankers and speculators that inves |