Wednesday, November 5, 2008

Capitalism and the Financial Crisis


(Walter Williams is in my opinion a brilliant man. At the end of this article he asks the question: "In the clamor for more regulation over our financial institutions, has anybody bothered to ask whether people in government know what they're doing? " That's what I've been asking for the past eight weeks! Now I'm wondering if the American people have ever heard of Economics 101. Fasten your seat belts my friends, hide your walets, we are in for a long and bumpy ride! VN8)


Walter E. Williams
Wednesday, November 05, 2008



There has always been contempt for economic liberty. Historically, our nation was an important, not complete, exception. It took the calamity of the Great Depression to bring about today's level of restrictions on economic liberty. Now we have another government-created calamity that has the prospect of moving us even further away from economic liberty with the news media and pundits creating the perception that the current crisis can be blamed on capitalism. We see comments such as those in the New York Times: "The United States has a culture that celebrates laissez-faire capitalism as the economic ideal. Or, "For 30 years, the nation's political system has been tilted in favor of business deregulation and against new rules." Another says, "Since 1997, Mr. Brown (the British Prime Minister) has been a powerful voice behind the Labor Party's embrace of an American-style economic philosophy that was light on regulation."

First, let's establish what laissez-faire capitalism is. Broadly defined, it is an economic system based on private ownership and control over of the means of production. Under laissez-faire capitalism, government activity is restricted to the protection of the individual's rights against fraud, theft and the initiation of physical force.

Professor George Reisman has written a very insightful article on his blog titled "The Myth that Laissez Faire Is Responsible for Our Financial Crisis." You can decide whether we have in an unregulated laissez-faire economy. There are 15 cabinet departments, nine of which control various aspects of the U.S. economy. They are the Departments of: Transportation, Housing and Urban Development, Health and Human Services, Education, Energy, Labor, Agriculture, Commerce, and Interior. In addition, there is the alphabet soup cluster of federal agencies such as: the IRS, the FRB and FDIC, the EPA, FDA, SEC, CFTC, NLRB, FTC, FCC, FERC, FEMA, FAA, CAA, INS, OHSA, CPSC, NHTSA, EEOC, BATF, DEA, NIH, and NASA.

Here's my question to you: Can one be sane and at the same time hold that ours is an unregulated laissez-faire economy? Better yet, tell me what a businessman, or for that matter you, can do that does not involve some kind of government regulation. A businessman must seek government approval for the minutest detail of his operation or face the wrath of some government agency, whether it's at the federal, state or local level. Just about everything we buy or use has some kind of government dictate involved whether it's package labeling, how many gallons of water to flush toilets or what pharmaceuticals can be prescribed. You say, "Williams, there's a reason for this government control." Yes, there's a reason for everything but that does not change the fact that there is massive government control over our economy.

It is incorrect to say that laissez-faire or free markets are unregulated. There is ruthless regulation, but it's not by government. Take the mortgage industry. In the absence of government interference, it is unlikely that a lender would extend a mortgage to a person with a poor credit history, making no down payment, and providing no verifiable employment history. But under the pressure of the government's Community Reinvestment Act and Fannie Mae and Freddie Mac buying up or guaranteeing such mortgages, a lender will.

When businesses make unwise decisions that lead to bankruptcy, their assets are sold off to someone else who might be able to put them to wiser use. Government bailouts give businesses a reprieve that the market wouldn't give them. Bailouts have at least two effects. They permit continued unwise use of resources and it creates what economists call moral hazard, the expectation of future bailouts and others hopping on the bailout wagon.

The blame for our current financial mess rests with government, with the major player being the Federal Reserve Board keeping interest rates artificially low and the congressional and White House market interference in the name of more home ownership. In the clamor for more regulation over our financial institutions, has anybody bothered to ask whether people in government know what they're doing?

8 comments:

陳順銓Chen,Shun-Chuan said...

The purpose of this email is to make certain accusations against the Chinese government and my
cry for help. Thank you for your time and your help will be highly appreciated.


http://tw.myblog.yahoo.com/shun-chuan

Are you aware that the news you are watching is interlaced with Communist China's propaganda,as
Communist China maps a realm of news with innocent lives?
Communist China is scheming a millennial terrorist activity by manipulating people's behaviors
through electromagnetic waves to contain criticism and harm innocent human lives.

1. The anomaly in community traffic of cars and motorcycles and drag racing,and reckless honking by
cars and motorcycles is exceeding an unprecedented level.
2. Communist China has the technology to scan the human brain waves through military satellite and
to discern and decipher their thoughts,scheming to instill individual interference focusing on
each individual in need using the satellite electromagnetic waves.
3. Deploying electromagnetic waves is poised to project onto the human brain with certain
sounds for the perception of grossly traumatizing or startling pain,or deploying the broadcast
of noise via electromagnetic waves in sleeping humans with edited clips of films or through
voice or image signals onto our brains or besiege our sensory functions with fabricated
audible and sensory illusions.
4. It manipulates one's moods,such as smiling,nervousness,disgust,panic,anger,sorrow,
desires,appetite,and so forth.
5. It interferes the human brain's thinking capability,memory or linguistic capability,to name a
few,causing spasms of muscles and fingers in the left and right hands,stinging aches
throughout the body,coughing,yawning,trembling,involuntary blinking of the eye,runny
nose and so forth.
6. Electromagnetic waves are deployed to hinder the motoring functions of the body and neck,
disrupt the heartbeat or respiration,manipulate dizziness,deprive one's sleep,spasm,saliva
gland,dental neural pain,etc.
7. Watch out that Communist China is infiltrating the news media by deploying electromagnetic
waves to besiege the broadcast media,map out viral disillusion or erroneous perception,and
investigate threats of brainwashing in viral spreading.
8. It further moved to deploy various symptoms in what one sees of media icons,gesture terms,
adding a skewed interpretation to one's cognitive awareness,misleading an individual to
hallucinate or suffer,such as the North Korean's rigid smile,which is a tactic Communist
China often deploys to counter the people.
9. By observing the resolution accuracy of Communist China's sound and image (scenario)
interference projected onto the human's brain,this can only be achieved with a certain level
of frequencies at the source of interference,hence there is no doubt that it has to be the
electromagnetic wave. Yet questions remain as to what range of frequencies the source of
interference deploys,or what kind of electromagnetic waves insulation chamber would suffice
to provide an insulation yield? Communist China might deploy specific metal alloys as small scale
molecular antennas, which are attached to the human brain in large number,creating
electromagnetic waves when the human brain is in function,where the current created by
Communist China's electromagnetic interference would poise to amplify in a staggering
number of multiplication,which Communist China can detect at all times to discern and
muscles would excel the generation of electrode,which in turn create a corresponding
electromagnetic wave within.
10. Some of Communist China's intimidation experiences in 2002:6.9 "Hey,are you tired of living?"
6.14 "We had concocted the bombing incident at the U.S. embassy in Pakistan"
"Jiang Zhemin ordered us to kill you,but without creating scenes"6.16 "The Pakistani
civilian troops confessed that they had schemed the bombing of the U.S. embassy in
Pakistan,which we had manipulated them to confess,so what are you going to do about it?"
6.19 "Hey,why don't you just go ahead and commit suicide""We are going to scheme
murder using the public bus"6.20 "Commit suicide by burning charcoal,get it?"6.25 "Jiang
Zhemin just does not like you,go hit your head against the wall".
11. I reckon that there are victims abound out in the street,no less alarming than wars,and those
not in the know or did not understand that Communist China's simple electromagnetic design
could easily turn people against each other,create moving incidents,little lese to say mislead
the youth to broach down the wrong path,suicidal prompting,design and fabrication of a host
of society news (which Communication China refers to as movie making),as Communist China has had a
decade long of the technology,and has long abused its technological advantages to scheme up design
of abusing human lives by arranging fabricated news to poison and infiltrate the free
world,manipulate and misguide the contents of the media,and deploy brainwashing and malicious
spread of viruses,done with insinuation and riddles.The fact that Communist China's slaughtering
the innocent had been the result of a high level of calculation,and a high level of rationalization,
where the threats are in existence,and cannot be ignored of their detrimental severity.
12. Communist China often coerce people to watch news compiled by the reporter Lu Yuling of the cable
news in order for them to be saved,but few are aware that Communist China had merely deploy the
reporter to entrap many people. I do envision that those that turn to committing crime as framed
by Communist China,the extra sufferings by the ordinary people,and the deaths of many innocent
lives will not go unnoticed as hindered by a condoning attitude.
13. Nazi Hu Jintao, Jiang Zemin, Chinese Liberation Army, security police and armed police have committed suppression and massacre on their own civilians. Hu, Jiang and the other atrocious butchers owe these innocent civilians! More horrible and serious is that they are using mysterious killing technologies to cause harms to human brains around the world, making advantage of numerous international politicians and journalists to help them commit atrocities and beautify their actions, aiming to overturn and suppress those innocent people and cover up their terrorist acts and win fame by cheating the world. Securing in the knowledge that they have strong backing, these arrogant and shameless butchers have committed tortures and mass killing cruelly to those innocent ones around the world. Unfortunately, neither these politicians and nor journalists knowing what is what would dare to express their conscience.
14. The inhumane acts and atrocities committed by Nazi China are far more vicious than that of Nanjing massacre in China during WWII committed by Japanese army, as Chinese government is using mysterious technologies to commit massacres to masses of bare-handed civilians around the world as well as launch violence and terrorist activities to suppress these completely unarmed people’s freedom of speech. These demons, like Hu, Jinag and Chinese Liberation Army, despise the chastity, dignity and precious life of those innocent ones and suppress the emotions of their beloved. Meanwhile, relying on the condition that most of people in the world will not be able to witness their vicious acts of violence and behaviors they have committed unscrupulously and shamelessly, these Chinese Liberation Army enjoys using cruel ways to torture, massacre and trample on these innocent people, physically and mentally, in one free world. The arrogant Hu, Jiang and those jackals nurtured under such ferocious power treat themselves as the symbol of benevolence and hero, as they fail to learn their gutless and vicious acts to trample on those innocent people. If these demons, butchers and dregs of human, such as Hu, Jiang and Chinese Liberation Army who have become frenzied and conscienceless appeared in the site of Nanjing massacre in WWII, they definitely would be the leading roles to act atrocities!
15. We don’t want to see masses of innocent people to fall victim to the hell on earth built by red China where they will be susceptible to tortures and massacres for thousands of years.
16. Despite being even unable to fend for themselves in face of the high-tech detriments and attacks from China, we can not tolerate the fact that these politicians and journalists will become the accomplices to help China commit its terrorist acts and suppression on these innocent people in the current era or an unknown future.
17. In view of the notorious, vicious and sinister Hu, Jiang, Chinese Liberation Army with blood-stained hands, we just cast doubt over whether these greats of knowing what is what who have negotiated with these demons will show their conscience to save these innocent civilians or will act just for the sake of their profits, or are under the control of China. In this current drowned world, how will these innocent lives be treated in face of the atrocious acts committed by these diabolical figures, or when these innocent people will witness the practice of democracy in China? Will these phenomena turn out to be the joint efforts and endeavors achieved by China and those powerful figures in the world? Are we really dedicated to overturning such adversity? Our goal is to eliminate the vicious power one day with our strenuous efforts, and we absolutely will achieve it!


Chen,Shun-Chuan 2002.10.13* Republic of China (Taiwan)

OweMe1Cannoli said...

Good Post, VN8. Williams is an outstanding analyst. I cannot remember the last time I listened or read a piece by him when I disagreed. This is no exception. IMHO, A relatively free form of lassaiz-faire can exist with a sort of roughed-in framework of guidelines. When the government over-regulates, it has the effect of manipulating the natural flow of capital that would normally allow business to grow. It is natural, because manufacturers would continuously develop their product or service to meet the needs of their customers. Customers would signal the need for such improvements with their market preferences. Government interference with this process makes it difficult for the producer to dedicate his attention to his customer, because his energies are diverted to satisfy matters of compliance. That expended energy can be translated into money which is reflected in the price of the goods or services. This is NOT lassaiz-faire, and not good for an economy that would be based on it.

OweMe1Cannoli said...

Psssst. VN8, I think Chen sorta likes you!

VoteNovember2008 said...

OM1C, wow that was a mouthful and I could not have articulated what you said if I tried, but I do love me some Walter Williams! LOL The man needs to run for political office but alas, I'm afraid that he is too SMART for that to happen! LOL

As for chen, what's up with that dude? He's on my prayer list because I wouldn't want to listen to all that honking and all those motorcycles either! LOL

Keep the faith brother, VN8

Country Comes To Town said...

I've studied a little economics.
ECON 201 Principles of Economics I
ECON 202 Principles of Economics II
ECON 303 Money and Banking
ECON 410 International Trade
ECON 414 Finance and Investments
Anyway just wanted to say yeah, this American knows a thing or two about the subject. Damn I still have nightmares about Dr. Drewery and that ECON303 class though. LOL

OweMe1Cannoli said...

Williams would be he an excellent candidate, which I'll bet he'd avoid. I'm also betting he would make a wonderful economic adviser to a smart campaign. He knows a thing or three about how the free market engine works, and I love to hear him speak. In the piece you feature here, he doesn't mince words about how government "tweaks" can gum up the works.

I'm sorry I took off on that last comment, but I've heard Williams speak many times on this subject, and that comment reflected what I took from his words. In looking at post-depression economics in this country, I think it's agreed that over regulation has a serious and detrimental downside.

Lee said...

Uh, yeah - what OM1C said.

VoteNovember2008 said...

Lee, I know what you mean! Ditto OM1C! Looking forward to 2012! VN8