October 20, 2008 - By True Patriot and
Congressman
Ron
Paul
In the midst of highly unpopular bailouts of Wall Street, many
justifications have been given about why Washington feels
the need to act. Some claim that capitalism and the free
market are to blame, but we have not had capitalism. If you
compare our financial capital to our aggregate debt, this
would be obvious. In the same way, we have not had a truly
free market. The monetary manipulations of the Federal Reserve,
a complex tax code, the many “oversight” agencies
and their mountains of regulations show that we are far removed
from a free market economy.
Another unsatisfying argument is that certain entities have
to be bailed out because of their economic importance. Supposedly,
some entities can be so big, so important, that no matter what
they do, citizens must perpetually sustain them.
Even limited government has a basic duty to defend against
force and fraud. Some argue that force is somehow permissible
just because the entity engaging in it is "economically
significant." But one could use this reasoning to prop
up slavery. It could be deemed unfortunate but economically
beneficial, and indeed these arguments have been used historically
to deprive people of their liberty. But slavery should never
be tolerated regardless of any economic benefit, just as systemic
fraud should not be tolerated. Some banks on Wall Street should
fail. Fannie and Freddie should fail. They are perpetrating
fraud against the people. Yet, government insists on rewarding
behavior which should instead be investigated, prosecuted,
and punished.
There has been much evidence of fraud at Fannie and Freddie,
but when one man, Franklin Raines, defrauded the organization
out of millions of dollars through illegal accounting tricks,
and ends up agreeing to pay back just a fraction, one could
argue that it was well worth it to him. Fannie went on to only
get more deeply involved in subprime mortgages after this investigation.
Several organizations are suffering right now precisely because
the free market is trying to work and punish mismanagement,
if only the government would get out of the way and let it.
Perhaps banks are not lending to each other because they know
that complicated accounting standards, created in part to defend
against confiscatory tax policy, enables false fiscal pictures
to be presented, which erodes trust. But this is not a time
for the government to step in with more burdensome and complicated
regulations, or more foolish liquidity injections. This is
a time for some banks to fail, and remaining banks to deal
honestly and transparently once again. More regulations will
only result in more lies.
Just as economies that turned away from slave labor had a
transition period, our economy would transition as well, but
in the end, if we turned to honest, sound money and a truly
free market, we would end up with a more just society, founded
on truthfulness and decency, not subject to the violence of
force or the whims of fraudulent institutions. Unfortunately,
it seems we are headed into a new era of slavery, however,
where all taxpayers will be forced to render to the Fed and
big banking interests the bulk of the fruits of their labor,
possibly through higher taxes but definitely through the eroding
force of inflation.
Read more Articles by Ron Paul at http://www.house.gov/paul/legis.shtml
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