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Shep: Regarding your Forbes article


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I found it to be very well written commentary. Although I'm not big on politics I early voted for Obama. Anyways, I liked it so much I sent it to a buddy of mine whose more of an Independent/Libertarian than anything else. Here's the e-mail he wrote back to me. I disagree with the fact that pulling the government away from all of our social/economics problems will magically solve them, however I agree with a few of his points in the last paragraph...



Though Obama's a law school graduate (I'm sure he knows how to "critically think"), our political atmosphere does not necessarily permit/promote "free thinking." That's obvious to anyone even marginally informed of the way Capitol Hill works. I'd like to think Obama (or McCain) could change something, but the fact of the matter is, he most likely will not.


He (in step with Congress) will make this "economic crisis" ten times worse than it has to be. They'll grow the bureaucracy and increase taxes, the fed will create more money out of thin air, and the government will yet AGAIN convince America that our economic problems are the result of a LACK of government intervention in the market. Obama himself has mentioned the necessity for these measures... the same exact measures that worsened the Great Depression. Any economist of the Austrian school could tell you that. They've been predicting virtually every market and monetary fluctuation since they've been around.


More taxes, a deficit and spending that is predicted to be higher than the Bush admin's (which he simply refuses to acknowledge), a vastly grown welfare state, more power to the judiciary for them to abuse, more wasteful spending on failed public schools, a foreign policy that will stay on the exact same course that it has for the last thirty years.


The only thing that will save this country is a return to limited, constitutional government. I have a solution to our problems...


Drastically cut spending, drastically cut taxes, withdraw American troops from Muslim states and any others that do not represent vital US interests, stop spending money on F-22s, seal the border, stop pushing NATO closer to Russia's doorstep, show some balls with China's unfair trading practices, and the majority of our problems are solved.


What are your thoughts on these points?

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It's the typical old school Right Wing rant: small government, lower taxes on the rich, fewer regulations, let the market work. Let's fix this thing by doing exactly what we were doing even moreso.


The world has changed, America has changed, and these are different times. New problems won't be fixed by the same old solutions. Hell, even Greenspan knows that.


Every single time we get a Republican administration, it seems we end up with a stock market crash, a widening gap between the haves and have nots, and a bloated deficit. They apply all of these principles to varying degrees.


Doesn't work.


Well, I suppose I'm acting as a messenger here but I may have sparked a little discussion. If you had Facebook (which I doubt) I'd let you in on the discussion board. But he elaborated on conservatism and I'm sure you'd have a better response on this than me. Not my words, his-


Anthony Giovanucci (Pasadena, CA) wrote

at 2:52pm yesterday:

i thought this was common knowledge that bush has grown the government and regulated the market tenfold. i'll tell you something, limited government has not once yielded negative results.


you're saying that conservative principles have a time limit. they do not. you're likening republican administrations to stock market crashes...


the harding and coolidge admins (of the 1920s) produced vast wealth for this country...real wages went WAY up, real per capital personal income grew by 38%, the general standard of living increased drastically, and from the summer of 1921 to 1929, stock prices of US traded firms increased 385%, (the biggest eight year rise ever recorded).


then you take a look at the admins of statists hoover and FDR (who were hostile to business) from 29 to 45...stock prices plunged 88%, unemployment was obviously rampant, the list of problems goes on. what's important to note is the government's taxation during these two time periods...after WWI, the highest marginal income tax rate was 77%. yes, 77%. harding and coolidge lowered this to 25% by 1925, while corporate profits tax rates were lowered.


the money supply increased during the 1920s (like it does today when the fed creates it out of thin air), but this was reflected in the growth rate of industrial output...a healthy increase, BECAUSE money was not created in excess (as it is today to 'remedy' out problems). because of this, wholesale and retail prices declined drastically. this deflation is directly correlated with the gold supply. (we are not on the gold standard today).


looking at FDR and hoover, who were sworn enemies to free markets...their actions were based on the idea that markets are unstable, and that the greed of businessmen had to be curbed right after the crash, hoover pressured businesses not to lower wage rates, despite the decline in business profits and the rise in unemployment. unemployment rose even further in accordance.


then there was smoot-hawley, which quadrupled tariff rates on goods imported here. this provoked tariff retaliation from thirty nations, worsening the great depression. because of this, there was less demand around the world for our farm products, which bankrupted farmers horribly. then there was the agricultural marketing act, the creation of the federal farm board, the RFC, and the federal employment stabilization board...i'll let you research these. essentially, all of these things crippled farmers, investors, businessmen, etc.


and here's the kicker to all of this...he blames foreigners for his own failed policies...those whose exports HE blocked with his tariffs...


then there's FDR, who took us off the gold standard and got rid of gold clauses in private and gov bonds - which protected lenders from inflation...private citizens who had gold of their own were forced to give it to the government or face imprisonment...this essentially sabotaged the monetary system...


as a statist, he believed markets had to be controlled and that the government was an effective indicator of what needed to be produced...he created the agricultural adjustment act, and the national industrial recovery act, which both harshly crippled market activity.


in 1939, the highest marginal income tax rate was yet again in the high 70%, and the tax rate on corporate profits was raised to 44% by 1941. 44%!!! price and wage controls pervaded our economic landscape. (these do not "work")


in sum, FDR's endless series of executive orders, mandates, and regulations intended solely to curb wealth creation, only succeeded in keeping the US economy as depressed as hoover had left it.


as the quote goes, "government does not and cannot create wealth, it can only borrow, steal, or destroy it."


the treasury department did a survey, i believe, several months ago, over the last ten years...

they found that the ONLY people getting "poorer" were the richest 5% of people in this country. the POOREST people actually more than DOUBLED, in some cases TRIPLED, their "income."

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