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Feds See Every Emergency as an Opportunity
Bill Bonner
Lew
Rockwell.com
Tuesday, Nov 3rd, 2009
It's a delight to be back in Buenos Aires. It's
springtime. The sun is shining. The birds are singing in the
trees. What more can you ask for?
Another national emergency! Terrorism...the banking crisis...now
Swine Flu.
Why it is an emergency, we don't know. Our sister, living in
Virginia tells us that several of her grandchildren have come
down with the Swine Flu. It doesn't seem to bother them anymore
than any other flu.
But every emergency is an opportunity. The feds don't want
to waste it. Instead, they swing into operation with a rescue
plan. It will end up costing billions...hundreds of billions...or
maybe even trillions. We don't know what they've got in mind.
But we know what will come of it. It will end up extending the
power and influence of the government. So far, the feds are
the only real winners from any of these crises. Federal outlays,
as a percentage of GDP have shot up from less than 20% of GDP
in 2000 to more than 26% in 2009.
Will it do any good? Public health is not central banking.
And it's not economic planning. Force everyone to wear a surgical
mask and maybe lives would be spared. Or, maybe not. Without
the immunity of occasional bouts of flu, who knows? Maybe people
would be more susceptible to the next disease. The American
Indians were almost wiped out...because they had no immunity
to European diseases.
Interesting...
Ain't nature amazing? Disease works like an economic correction.
It winnows out the weak...and it toughens up survivors. Allowing
people to get sick is a little like allowing them to go broke.
It keeps the whole system from softening up...from becoming
more vulnerable. It protects people from moral and biological
hazard. In other words, it's the correction that really provides
protection...the disease itself, not the cure. Or, to put it
another way, it's the crash that is beneficial, not the rescue.
David Einhorn, one of the few people to make money in the crash
of sub-prime debt:
"The financial reform on the table is analogous to our
response to airline terrorism by frisking grandma and taking
away everyone's shampoo. It gives the appearance of "doing
something" and adds to our bureaucracy without really making
anything safer."
The Wall Street Journal reports that even bankruptcy can be
a good thing. "Household Debt Can Hasten Recovery...when
it goes unpaid," says a headline.
The whole idea of a correction is to wash out mistakes. If
people can pay their debts down, the mistakes are corrected.
The system is strengthened. If they can't, the process of correction
can happen faster. Bad debts are written off quickly. Then,
a real recovery can begin. Either way, the system comes back
in better shape.
Too bad the feds are getting in the way!
A decent correction should carry off those who made the biggest
mistakes – in the present case, the firms on Wall Street
that wagered billions on a bigger and bigger bubble. But instead
of letting them go broke, the feds rewarded them.
Wall Street profits are a "gift" from the state,
says George Soros.
But wait, what kind of gift is this? If you give $100 to your
neighbor, that's a gift. But what if you tax your neighbor on
the left $100 in order to give the money to your neighbor on
the right? That's a gift too...but of a special kind. You're
"redistributing the wealth," you might say.
And what if you do a quantitative easing? You know, you print
up a $100 bill and give it to your neighbor? That's a gift too.
Yeah, thanks a lot.
Meanwhile, the recession is said to have come to an end in
the US. GDP growth is positive, say the papers. But if this
is a recovery, let's hope it comes to an end soon.
Existing house prices continued to fall in September.
Unemployment continued to worsen. "Signs of recovery don't
extend to jobs," says the WSJ.
"When the people find they can vote themselves
money, that will herald the end of the republic."
- Fall Of The Republic - Buy
the DVD here
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INFOWARS:
BECAUSE THERE'S A WAR ON FOR YOUR MIND
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