Friday, October 8, 2010

GOP Destroyed America!

Republicans stand guilty of collaboration with progressives

Market Watch's Paul Farrell has written a scathing critique of Republicans, entitled GOP Destroyed the US Economy, where he comments on Reagan OMB Director David Stockman's stinging rebuke of Republican economic policy.

I'm particularly attuned to Reagan criticism, since I combat so much of it in Left Blogistan.  Lefty critiques are incoherent babble, easily refuted, but the libertarian thrusts draw blood.  Farrell and Stockman, though not libertarians, nonetheless deploy classic Rothbardian arguments (excepting their advocacy for higher taxes and protectionism).

Here Are the Four Republican Sins that Set Us on the Road to Perdition

  • Nixon reneging on the Bretton Woods agreement and completely decoupling the US dollar from the price of gold.  The precipitous decline of our dollar is the result
  • Crushing debts, from domestic pork and overseas adventures
  • Corporate welfare for Wall Street
  • Addiction to cheap crap and easy money has hollowed out our economy
We are a Progressive Nation
All I can say in defense of Republicans is they worked with what they had.  Give a sculptor a pile of dung, and she can sculpt something with it.  It won't come out as beautiful as her work in clay...

Progressives built a doomsday device.  Try to dismantle it and it will explode, destroying our nation and society.  You can't starve the beast without starving granny.

But this excuse won't fly anymore.  If the GOP gets power back, they had better use it to shatter the existing system, or we are done for.

Free Markets, Free People:  Let's try it here in America
We have been suffering under the fallacy that there is not downside to government programs.  Austrian School libertarian Kel Kelly provides some guidance:
in a free market, we would not need government "protection" because we would be protected by tough competition in the marketplace. If one company tried to underpay or overcharge us, there would be many more companies we could turn to that were offering higher wages and lower prices (i.e., market wages and prices) in order to attract us.

Companies would therefore find ways to produce with lower costs, a goal they could more easily accomplish with more capital available to them. The more capital they employed and the greater workers' corresponding productivity, the higher the market wages.

Stop the Printing Presses!
And without the government's manipulation of interest rates and the printing of money, there would be no wide-scale malinvestment, and therefore no recessions and financial crises. In this case, prices would fall instead of rise most years, and our lives would generally improve through time.

You could also save your money in a safe, low interest bank account and not have it nibbled away by inflation, thereby being able to support yourself in your old age.

Failure:  Businesses go broke - Government grows bigger
No central planner can determine what is best for each of us individually or in the aggregate. The economy works only though individual decisions and choices.
No politician can help companies produce more efficiently or in a way that better pleases consumers. By using market prices and rates of profit, businesses generally best determine what we individuals want for our lives. If they judge correctly and produce what we need and desire, they succeed; if they don't, they die.

Government, on the other hand, dictates what it wants us to have, and has no system of profit and loss to determine whether it is succeeding in pleasing its "customers," or whether it is producing or destroying wealth in the process. Since it can't determine its success or failure in money terms, it is necessarily always destroying wealth on a net basis. And since government is a monopoly, it does not allow competitors for us to turn to.

Is government doing a "good job?"
The only real test of whether a "good job" is done is whether or not it has become easier for people — all people — to achieve an increased living standard from one year to the next, given the same amount of labor hours performed.

Excerpts from Kel Kelly - Can Politicians Help Us?


Trestin said...

I could not agree more. Reagan was slight slow in the Progressive trend of the Republican party. The Bushes have built on what Nixon and carter did and made it much worse.

Maggie Thornton said...

Great article, Silverfiddle! Nixon really set us up for trouble by dropping the gold standard. Too bad your article isn't a teaching tool in High Schools.

Silverfiddle said...

Thanks Trestin and Maggie!

Our friends in in Left Blogistan correctly point out republican errors, but fail to realize that the root cause is the progressive system set up by democrats.

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