Doc Thought

The next time you hear someone denounce the 'greed' of the extreme *free* market, of capitalism, try to remember that this is NOT what we have. The US economy was close but not entirely free during the early parts of the industrial revolution. Now, even the term 'mixed' economy is starting to be strained by the overwhelming pervasiveness of the American government in regulating, pressuring, tweaking, pulling, and adjusting all aspects of the economy. At times you will hear a leader of a big business disparage laissez faire capitalism or the free market. Do not be misled into thinking that, well, if a big business man thinks the free economy is unfair or ill suited to producing a just, profitable economy for all, then surely we are justified in fiddling with it. Without exception, this will be a businessman whose interests and competitive advantage depends on PULL in Washington. The very presence of the innumerable Congressional lobbyists and the billions pou...

Though Alexis de Tocqueville’s analysis of democracy in America in the 1800’s included a variety of misunderstandings, some of his insights deserve revisiting, for they were sadly prophetic of how a government founded on individual liberty could be poisoned and destroyed from within. Democracy and socialism have nothing in common but one word, equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude. The man who asks of freedom anything other than itself is born to be a slave. The American Republic will endure, until politicians realize they can bribe the people with their own money. After having thus successively taken each member of the community in its powerful grasp and fashioned him at will [via a compulsory collectivist, revisionist education], the government then extends its arm over the whole community. It covers the surface of society with a network of small, complicated rules, minute and uniform...

There is a real danger in reading this post. Your eyes will likely cross, gloss over, and a bit of spittle will possibly begin to trickle from the corner of your mouth. In my attempt to understand the causes of the recent financial crisis, I, by necessity, undertook what has turned out to be self torture - the attempt to understand the mechanisms and definitions of the "shadow banking system." Mortgage backed securities are the most well known component of this shadow system. The least painful exposition of some of these instruments has been provided by Mr. Holloway. Read his article "Is this complicated, or What?," by scrolling to the last article on the page.

This bit from Eugene Holloway aptly describes the picture of our government, the few who presume to speak for society rather than defend individuals, as they try to control what is beyond control. Recent decades give ample evidence of the disastrous futility of the Fed’s attempts to use its crude tools to repair the damage of its own previous actions. Injections of liquidity to stop the meltdown in the wake of the failure of Long Term Capital Management fueled the internet bubble. Injections of liquidity to avoid a market crash when the internet bubble burst fueled the housing bubble. Now, following the bursting of that bubble, the Fed is making historically huge amounts of credit available to keep the economy afloat. But the size of each of the bubbles grows progressively. If this were only a game of whack-a-mole, it would be amusing. But money is ubiquitous, and whatever moves the Fed makes can, and do, affect anyone and everyone. The human consequences of Fed-generated boom-and-bust...

This blog is intended to articulate what made this country great, and why and how that greatness is disintegrating. In the broadest of strokes, this country became great by doing what no country had done, and no country has done since - setting out to defend the rights of the individual (life, liberty, pursuit of happiness) as SUPERSEDING the rights or demands of government, or society as a whole. Based on a Christian worldview, the founders of the United States created a government that saw each man and woman as AN END IN THEMSELVES, and NOT as the means to the ends of society or government. They conceived the government as a policeman, protecting the products of each man and woman's minds and efforts from the clutches of other men, other groups, government, and most importantly from the community as a whole. Men and women were NOT to be slaves. This was historic in the most awesome sense. It led to the greatest period of economic growth, increase in living standard, w...