Responding to a letter from a concerned citizen
Continued from Part 1
This gets me to the subject of bailouts. The big bailouts that took place in 2008 and 2009 completely outraged the majority of the American people. These bailouts were also a crime against the free market and against capitalism. The whole concept of pure, untainted free market capitalism is that a business has to work hard to compete with other businesses and provide its goods and services at the best quality and lowest price. This is one reason why McDonalds and Taco Bell, who have very low-priced value menus with a wide variety of choices, have done a lot better than other higher-priced fast food chains who have had to close down many locations. This is also why Borders, who didn’t cater to the consumer demand for e-reader books (Kindle, Nook, iPad, etc.), is going out of business, whereas Barnes and Noble, who did cater to that demand, is still in business, and why Honda and Toyota’s low-priced, superior quality cars are outselling Ford while General Motors had to be bailed out.
Businesses that fail need to be allowed to fail once and for all, which weeds out the bad elements of industry and allows room for new contenders (small and medium-sized businesses or new entrepreneurs) to try their luck at meeting the un-met consumer demands. When big businesses fail and lay off their workers, these new contenders will be the ones to hire the laid off working people, and if the new blood meets consumer demand, then they will succeed.
Thomas Woods, the author of The Politically Incorrect Guide to American History, wrote a fantastic book called Meltdown, which analyzes the Great Depression, the current recession, and vindicates free market capitalism from the lies of the statists and interventionists. The truth is that when the federal government bailed out all those failed banks in 08-09, as well as parts of the auto and housing industry, they gave these failed businesses a “second chance” which will only postpone another inevitable collapse. This is like an angry and heartbroken wife, whose husband was cheating on her, giving that husband a “second chance” in which he doesn’t have to shape up but instead can keep cheating on her until he gets caught again.
These bailouts, which only punished the American people and the big and small businesses who were doing the right thing, and rewarded the failure of the businesses who were doing the wrong thing. These bailouts were financed by the Federal Reserve System, which is a quasi-government organization that is basically in charge of big banks (Wells Fargo, Chase, Citibank, etc.) and financial organizations (AIG, Fannie Mae and Freddie Mac, etc.). Banks are businesses, not storage lockers for money, and rather than letting these businesses try to figure out how to meet the demands of their clients, the Federal Reserve tells them how much to hold in the vaults, how much to lend, and how much to invest. The Federal Reserve also has the power to print as much money as it wants, which is obviously bad because the more money that is being printed means inflation goes up.
Before the Federal Reserve, there was a U.S. Central bank which was on a gold standard. The gold standard means that every paper dollar printed needs to have an actual gold dollar that exists somewhere in a bank. Gold is real money and paper is just an I.O.U. This was alright though, because with real gold backing up the I.O.U., people had faith in the paper, and they used it for everyday buying and selling. Even if the central bank used a fractional gold reserve (for every gold dollar there is, they print two or three or four), there was at least SOMETHING partially backing up the paper money. Nowadays more and more paper money is printed with nothing to back it up other than the “good credit of the United States.”
When the Federal Reserve was created in 1913 by J.P. Morgan, John Rockefeller, and a few government employees and politicians that were in their pockets, it was created with the intent to expand the money supply (inflation) and bail out particular businesses and industries which Morgan and Rockefeller were conveniently invested in. The Fed essentially became the new central bank and began to coerce banks into doing whatever it ordered. It also began printing more and more money to pay for expensive and Unconstitutional government grants, loans, bailouts, and other programs. It is because of the evils of the Fed that inflation is so high (prices are so high) and the dollar is almost worthless. The gold standard has been abandoned and the Fed will continue to manipulate banks and financial institutions and kill our dollar. The only way to reverse this is to reinstate the Gold Standard and abolish the Federal Reserve.
To sum up the above points I made: 1) Government interventions, including those in the form of tariffs, are very bad for business, workers, and the whole economy. 2) The free market is about competition and consumer sovereignty. Don’t necessarily buy American—buy what’s best. 3) Bailouts are anti-capitalistic and the only way to stop this is to bring back the Gold Standard and end the fed.
Finally, in your email to me you mentioned that in all your readings, you found no one with real solutions or sufficient character and a backbone. I can honestly say to you that there is a hardworking group of people who are engaged in a grass roots effort to support an honest and hardworking man who is painfully aware not only of the REAL problems that are hurting the working class, but of real solutions to those problems. This man of course is Ron Paul, who is an outspoken Austrian school economist who has been able to pinpoint problems and their remedies. He is the only Republican contender who has tackled these issues, regardless of how unpopular the truth was, and remained unwavering in his position. If you’ve heard of him but have found cause to distrust him, I beg you to reconsider and see what he has to say.
He has three very popular books out (among many others he’s written) which have changed the minds of many Americans. There is The Revolution: A Manifesto, in which he outlines his political platform and uses the Constitution, American and world history, and the guidance of the Founding Fathers to back up his platform. In the book End the Fed he makes the case and the plan for abolishing the Federal Reserve System and reviving the value of our hard-earned money. In his latest book, Liberty Defined, he provides ideas for Constitutional solutions to various political, fiscal, and social ills that are plaguing our society. I certainly hope my short explanation provided you with some meaningful answers, or at least provoked your thinking and ore beliefs. I truly hope you also take into consideration the reading I recommended to you, which surely changed my thinking and strengthened my beliefs. God be with you, my friend.