Maybe the biggest question is “what caused the meltdown that is occurring now?” Ron Paul explains that the trail can be followed back to 2001 when interest rates were kept low to forestall a recession. Greenspan slashed rates from 6.5% in 2001 to 1% in 2003. Paul says, “Everyone in those days was consumed by the drive to not let the terrorists win. Well, the Fed assisted in undermining the foundation of the structure of the American economy and, in the long run, did more damage to economic prosperity than the attacks of 9/11.” He says that the risk of recession, by providing an artificial stimulus was the wrong move, meanwhile, it was the perfect opportunity to set things right and put the economy back on a firm setting, because they could implemented responsible monetary policy, not emotional policy.
Paul argues that most people in Washington simply don’t understand the complex structure of the economy and the American economic system. He tells a story about when he was approached by a member and asked if the US was still on the gold standard. These are the people elected! Some understand the system, but don’t want the truth out that the fiat system primarily benefits big government, big corporations, and big banks. But, if there are people who don’t know, then there are people who know. Paul again brings up the Austrian Economists (see part 1). He says that the economists knew, in 1914, that the structure would not last and predicted its downfall, eventually; that was the beginning of the end of the fiat money system.
I would like to think of this next part as a foundation for philosophy. In reading about superheros, one wonders why they do what they do? Think of Captain America. He has all that power, why does he chose to do what he does? During the Marvel Civil War, there was a law passed that made it a crime to fight and not be registered with the government. Captain fought for the rights of anonymity and againts superhero registration; he fought and against Iron Man. Eventually Capt. turned himself in to face trial for treason because he knew the war was causing harm to people and he decided to pay the consequences of his decision to fight against the law. It is a very interesting story and it shows the depth of comic writing. Anyways, I digress...
About the current mess, Paul writes that “in a structured social-welfare interventionist state, no one become solely responsible for his or her actions.” When did it turn out like this? At the end of Civil War, Captain America is...(don’t read on if you want to read it yourself and skip the next paragraph)... assassinated. I think the death of Captain America shows something about the nature and character of current America. Have we lost are way?
Rand’s objectivism states that the free-market system will keep things like our current mess from occurring. The market is a natural system that responds to the environment and corrects itself. When a person is on drugs, they do not respond appropriately to situations. The rationale fades, mood swings occur, basically they do not normal and the problem usually escalates and gets worse. The Fed gave the free-market a lot of “drugs” and basically its response was based on delusions. The problem is that we are the victims of the Fed’s choices. The economy of America was propped up by the decisions of one group who feels that they have a infinite revenue source (America Taxpayers).
Paul writes emphatically, “Moral hazard breeds dependency, neglect, and sacrifice of liberty, tolerance of false monetary doctrines, and promises of wealth without work.” I have learned early on that work is the one thing that can get a person somewhere. It is the most fundamental of American principles. Paul continues, “Paper money advocates make promises to the masses in order to appease them, ...and bring paradise to the world.”
If you wondered how central banking, artificial interest rates, and government creates this, Paul explains that, “artificially low interest rates are achieved by inflating the money supply, and they penalize the thrifty and cheat those who save. They promote consumption and borrowing over savings and investing. Manipulating interest rates is an immoral act. It’s economically destructive.” Who would have thought that economics had a moral component? When the outcomes affect people, I guess they do.
He explains that the market depends on information and when it manipulated, the information is not correct. He argues that price-fixing the basic job of a central banking system and is essentially a form of socialism. He responds to those that say that: the free-market is to blame for this current situation, is that the truth is that: the market wasn’t free, its been manipulated for the aggrandizement of the politicians. He states that free markets create sound money and have low rates as a consequence. The difference is that the low rates are real and aren’t an illusion created from a bubble.
The act of acting morally and righteously has the unfortunate reality of affecting some negatively. A truly responsible person does the right thing regardless of the consequences or the public perception. Hopefully the outcomes are good, but sometimes they are not. Captain America took the consequence of imprisonment for his conduct, Socrates accepted his consequence too. How come John Edwards and others from his moral-type cannot understand that actions have consequences and that ‘responsibility’ is not just a word that people use; but live by? I think a piece of America has died. The good thing is that the missing piece of our America can come back, but it takes the individual to be responsible. They also have to hold others accountable for their actions. Sometimes we just have to pay the price for fighting the good fight. I think we can all learn a little something about moral structure from superheros.
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