Atlas has Shrugged!
When the government tries to “fix” the economy, we lose. We lose because the government uses smoke and mirrors to help Politicians’ cronies to win. “The Great Deformation”, is what former Reagan budget director, David Stockman, calls what the Fed and the Treasury has done to our economy. The government twists and turns there own regulatory failures into new regulations that further destroy our economy and ultimately our society.
It’s true that both major political parties failed ordinary Americans when the housing bubble burst, and they rushed to bail out cronies at big banks. Government continues to threaten our future by printing mountains of money and guaranteeing trillions in loans to banks, homeowners, students and other politically connected groups. This binge of money printing only serves to make us all poorer by devaluating our money through inflation.
The political class claims the economy would have been destroyed in 2008 without a bailout of the big banks. Stockman believes that’s a myth: “The Main Street banks were not going to go into a huge retail bank run … and (Fed chairman Ben) Bernanke is totally wrong when he says we were on the verge of Depression 2.0! We would have worked our way through it. We’ve done it many times in history.”
We would have worked through it all without government interference. Worked our way through it? Without the bailouts, there might have been a bigger stock market drop, and more businesses would have closed! But Stockman says, so what? It would have been worth it. I agree that it would have been worth it.
Today, taxpayers would be $1 trillion richer and not on the hook for trillions in loan guarantees. Prices would now have found a natural floor, business would be eagerly hiring again, and America would be free of moral hazards like “too big to fail” banks. We have become what Ayn Rand feared and portended in Atlas Shrugged; we have become dominated by a society driven by the successful owe me something.
We better hope that the people who make our society successful never go on strike. For if they do, we are all doomed !