Ron Paul on the bailout - amazing!

http://www.campaignforliberty.com/blog/?p=616
My Answer to the President
Dear Friends:
The financial meltdown the economists of the Austrian School predicted has arrived.
We are in this crisis because of an excess of artificially created credit at the hands of the Federal Reserve System. The solution being proposed? More artificial credit by the Federal Reserve. No liquidation of bad debt and malinvestment is to be allowed. By doing more of the same, we will only continue and intensify the distortions in our economy - all the capital misallocation, all the malinvestment - and prevent the market’s attempt to re-establish rational pricing of houses and other assets.
Last night the president addressed the nation about the financial crisis. There is no point in going through his remarks line by line, since I’d only be repeating what I’ve been saying over and over - not just for the past several days, but for years and even decades.
Still, at least a few observations are necessary.
The president assures us that his administration “is working with Congress to address the root cause behind much of the instability in our markets.” Care to take a guess at whether the Federal Reserve and its money creation spree were even mentioned?
We are told that “low interest rates” led to excessive borrowing, but we are not told how these low interest rates came about. They were a deliberate policy of the Federal Reserve. As always, artificially low interest rates distort the market. Entrepreneurs engage in malinvestments - investments that do not make sense in light of current resource availability, that occur in more temporally remote stages of the capital structure than the pattern of consumer demand can support, and that would not have been made at all if the interest rate had been permitted to tell the truth instead of being toyed with by the Fed.
Not a word about any of that, of course, because Americans might then discover how the great wise men in Washington caused this great debacle. Better to keep scapegoating the mortgage industry or “wildcat capitalism” (as if we actually have a pure free market!).
Speaking about Fannie Mae and Freddie Mac, the president said: “Because these companies were chartered by Congress, many believed they were guaranteed by the federal government. This allowed them to borrow enormous sums of money, fuel the market for questionable investments, and put our financial system at risk.”
Doesn’t that prove the foolishness of chartering Fannie and Freddie in the first place? Doesn’t that suggest that maybe, just maybe, government may have contributed to this mess? And of course, by bailing out Fannie and Freddie, hasn’t the federal government shown that the “many” who “believed they were guaranteed by the federal government” were in fact correct?
Then come the scare tactics. If we don’t give dictatorial powers to the Treasury Secretary “the stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet.” Left unsaid, naturally, is that with the bailout and all the money and credit that must be produced out of thin air to fund it, the value of your retirement account will drop anyway, because the value of the dollar will suffer a precipitous decline. As for home prices, they are obviously much too high, and supply and demand cannot equilibrate if government insists on propping them up.
It’s the same destructive strategy that government tried during the Great Depression: prop up prices at all costs. The Depression went on for over a decade. On the other hand, when liquidation was allowed to occur in the equally devastating downturn of 1921, the economy recovered within less than a year.
The president also tells us that Senators McCain and Obama will join him at the White House today in order to figure out how to get the bipartisan bailout passed. The two senators would do their country much more good if they stayed on the campaign trail debating who the bigger celebrity is, or whatever it is that occupies their attention these days.
F.A. Hayek won the Nobel Prize for showing how central banks’ manipulation of interest rates creates the boom-bust cycle with which we are sadly familiar. In 1932, in the depths of the Great Depression, he described the foolish policies being pursued in his day - and which are being proposed, just as destructively, in our own:
Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion.
To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about; because we are suffering from a misdirection of production, we want to create further misdirection - a procedure that can only lead to a much more severe crisis as soon as the credit expansion comes to an end… It is probably to this experiment, together with the attempts to prevent liquidation once the crisis had come, that we owe the exceptional severity and duration of the depression.
The only thing we learn from history, I am afraid, is that we do not learn from history.
The very people who have spent the past several years assuring us that the economy is fundamentally sound, and who themselves foolishly cheered the extension of all these novel kinds of mortgages, are the ones who now claim to be the experts who will restore prosperity! Just how spectacularly wrong, how utterly without a clue, does someone have to be before his expert status is called into question?
Oh, and did you notice that the bailout is now being called a “rescue plan”? I guess “bailout” wasn’t sitting too well with the American people.
The very people who with somber faces tell us of their deep concern for the spread of democracy around the world are the ones most insistent on forcing a bill through Congress that the American people overwhelmingly oppose. The very fact that some of you seem to think you’re supposed to have a voice in all this actually seems to annoy them.
I continue to urge you to contact your representatives and give them a piece of your mind. I myself am doing everything I can to promote the correct point of view on the crisis. Be sure also to educate yourselves on these subjects - the Campaign for Liberty blog is an excellent place to start. Read the posts, ask questions in the comment section, and learn.
H.G. Wells once said that civilization was in a race between education and catastrophe. Let us learn the truth and spread it as far and wide as our circumstances allow. For the truth is the greatest weapon we have.
In liberty,
Ron Paul

A quick description of what we can do

Check this post out for a quick summary if you don't want to read more. PLEASE contact your elected representatives and tell them not to support this bailout!

http://www.campaignforliberty.com/blog/wp-content/uploads/2008/09/bailout.pdf

Do you still trust the government? Bailout thoughts...

Ok, we're trying to learn how to think - we've shared that. For starters, we're just posting some of the things that are most helpful to us. Wish I could think and write like this:

SOURCE: http://mises.org/story/3126#

Bush the Socialist Destroyer
Daily Article by Llewellyn H. Rockwell, Jr. Posted on 9/26/2008
Anyone who has read a good economics book would be quickly reduced to laughter and tears by George Bush's ridiculous economic address to the nation. He put on his 9-11 suit and tried to warn Americans about the impending disaster: that their access to an infinite stream of paper money might be imperiled if they don't cough up hundreds of billions immediately. It is very tempting to go line by line and shout back.
I'm a strong believer in free enterprise, so my natural instinct is to oppose government intervention. I believe companies that make bad decisions should be allowed to go out of business."
And this is why he nationalized airport security, created huge new bureaucracies, spent more than any president in American history, centralized control of education, put up more protectionist barriers than Clinton and Bush Sr. combined, bailed out airlines, presided over the Sarbanes-Oxley reign of terror, unleashed antitrust regulators, intensified health-care controls, and pretty much used every headline as an excuse to demand more money and power?
The FDIC has been in existence for 75 years, and no one has ever lost a penny on an insured deposit, and this will not change.
But the penny itself has lost 94% of its value in those 75 years precisely because of institutions such as the FDIC and the Fed. Does he really think we are that foolish?
Here is my favorite:
The problems we're witnessing today developed over a long period of time. For more than a decade, a massive amount of money flowed into the United States from investors abroad because our country is an attractive and secure place to do business.
So those nasty foreigners did it to us, huh? Maybe it was Bin Laden who sneakily tried to create a credit bubble by investing in US stocks!
And here is his description of the grave calamity we face:
As uncertainty has grown, many banks have restricted lending, credit markets have frozen, and families and businesses have found it harder to borrow money.
Imagine that! We might have to live within our means for a bit. That would actually be a wonderful thing. Maybe a recession would last a year or 18 months, and then we would be back on solid footing again. He very nearly admits that too much credit is what created this mess. So he proposes more credit so that we can continue to live on too much credit. And then what happens next time? Ever more credit? This path ends in Weimer-level inflation and total destruction.
What is striking here is the level of public opposition. It is somewhere between 55 and 90 percent, depending on the way the question is worded. Also, it is wide and deep opposition. It is made up of Democrats, Republicans, liberals, conservatives, blacks, whites, rich, poor, men, women — just about everyone, with no systematic bias among the polled groups. In other words, we have here a wonderful thing: a clash of group interests, as Mises would say. It is the state and its friends vs. the American people.
That doesn't mean that Congress won't pass something or other. The administration is prepared to pay off every member. And yet the proximity to the election complicates matters. A lost election means no payoff, no matter what. If public anger is intense enough, these guys might balk in the end.
This would be a glorious result. The "credit crisis," as Bush describes it, is nothing more than the kind of crisis a college kid faces when his parents cut back on the deposits to his checking account. It means less high living, a few more nights moping in the dorm rather than going out with his drinking buddies. It does not mean the end of the world.
The market is working now to make things right, to eliminate bad debt and get us back on a sound economic footing. The government can help by legalizing alternative monies, cutting regulations, cutting spending and taxing and wars (as Ron Paul says), but otherwise by doing absolutely nothing. Lehman failed on its own and yet life goes on. The same should happen to Goldman, Morgan, Bear, GM, and all the rest.
Free enterprise is a profit and loss system. This is a time of losses, stemming from an overinflated credit sector — one that the Austrian economists have warned about for many years. Listen to the Austrians now and permit the failures to occur.
By the way, since when has it been an article of our national religion that the economy must never, ever, under any circumstances, be permitted to fall into recession, even slightly? This is completely insane.
The books you need to get to your congressman and staff now are America's Great Depression and The Mystery of Banking. The first explains that it was credit expansion and the attempt to keep prices high that prolonged the Depression, which would otherwise have ended by 1931 or 1932. On this point Bernanke is all wet.
The second book explains how money and banking work in a free market, as opposed to a subsidized, fiat-money, centralized system. These are the two most essential books of our time, because they completely overthrow the prevailing theory behind the bailout.
Our choice is this. We can buckle down for a year-long recession and then get on the path to financial and economic soundness. Or we can set off a calamity that will last a decade or more, and perhaps even wreck civilization as we know it. That's our choice.

Llewellyn H. Rockwell, Jr. is president of the Ludwig von Mises Institute in Auburn, Alabama, editor of LewRockwell.com, and author of Speaking of Liberty. Comment on the blog.

Don't waste your vote

Ok - we've been doing a lot of thinking about the upcoming election - ashamed we never did it before now, but glad we're thinking now. What about you? How many hours have you taken to independently and purposefully research the true issues and where the candidates really stand? Don't have time? How many TV shows have you watched in the last 3 months? I can say for myself absolutely zero, except what I get in the doctor's office or somewhere similar.

All I'm saying is we should think. We should stretch our brains, debate one another, and try to understand why things are they way they are and how we'd like them to be different.

Some questions to consider - I couldn't answer them well even now, but I would like to get there before the next election.

What really is the role of government? And not only that, but what is your answer based on? If it's based on your own experiences, what you've heard on TV, or what you think up right now, maybe you haven't thought about it enough yet. I haven't. But how can I vote for the leader of our government, in light of all his promises and platitudes about how he'll operate the government, if I don't have a clear understanding of what goverment should even do?

Have you taken the time to question your own beliefs, or the assertions and promises made by the politicians?

Do you truly believe you're wasting your vote if you vote for a third party candidate? What is the purpose of voting? Is it like horse racing - where all that matters is picking the winner? If you get one vote in 300 million, is it more important that you vote for what you really believe in, thereby sending a message to the political establishment, or is it more important that the powerful politicians we have remain in power?

How do I get John McCain to listen to me? Or Barack Obama? Or any other candidate? They certainly aren't going to respond to an e-mail, or even a well-written letter. What do they care about? What are they out there trying so hard to get from me? My single solitary vote! That's what they care about. So that's how we get our message to them. Do you think they care what I think? No, but they need my vote - and yours. So will you reward them for not accurately representing you by voting for them anyway? Will you cave to the prevailing notion that to vote for the person you really believe is best for the presidency is to waste your vote? If you're going to vote for someone you don't like (the lesser of 2 evils), then why vote at all? So that's why I say, "Why am I voting in this election?" Have we thought through this? We must take the time to learn how to think again. I have been amazed by the 3rd party candidates as I've watched them on YouTube. Many don't even have speechwriters or teleprompters! How can someone get up and speak to a huge crowd for over an hour without a teleprompter? They can do it because what they're saying comes from well-thought out CONVICTION, not political strategizing that says how each word must come out. Do you want people leading you who know how to lead, how to communicate? Or do you want someone who is so concerned with how they look that they use a teleprompter? They have us figured out. We care more that a candidate says "nuclear" wrong than we care that the candidate has a proper constituational understanding of the use of nuclear weapons! The politicians have this figured out. It's far more important to say something well than to say something substantial! Why do they have so many strategists and aides? They're only trying to win. And they will coax our vote out of us any way they can. So don't give your one and only prized vote to a candidate who doesn't represent you. Don't waste your voice raising your voice in support of someone you don't agree with! We must make our voices heard in the one way the politicans will hear - by casting our vote for someone we truly support. My vote is as valuable to a politician whether they like me or not, whether they represent me or not. Your vote is your only voice! So don't waste your vote - don't give it to someone who will gladly accept it whether you truly support them or not! Give your vote to someone who you believe deserves it! It is absolutely true that if enough people do this, the politicians will take note!

Consider & Think...

This is what we have been doing lately! So much to think about!
Whether it be about politics, medical care, family issues, child raising philosophies, education choices, etc., we all need to THINK through things, pray about them, and talk about them! We want to think about why we do the things we do. Have Americans lost that ability? Have we been "dumbed down?" Oh the millions of things to write about....

We all won't agree on everything all of the time, but what we want do is to learn to engage our family and friends on the issues that matter and which effect us all.

We desire to seek God's will and direction for our lives. We desire to honor and glorify God with our desires, attitudes, and actions.

*Psalm 19:7
The law of the LORD is perfect, reviving the soul. The statutes of the LORD are trustworthy, making wise the simple.

*Proverbs 3: 4-6
Trust in the LORD with all your heart and lean not on your own understanding; in all your ways acknowledge him, and HE will make your paths straight.

May the words of our mouths and the mediation of our hearts be pleasing to you, Lord.