The Cache

Hardly a day goes by now when we don’t see headlines about another huge chunk of money coming out of Washington to stabilize a bank, shore up credit, rescue somebody’s bad mortgage investments, save some neer-do-well’s house, or bailout an industry. Each time the number sounds vaguely familiar. Does $700 billion have a constant ring to it? Is it from that singular pot of federal money or is it another huge chunk being added to an exponentially increasing total? Is this $300 billion the same as that $300 billion? Are we dispensing the first, second or third trillion this week?

Has anybody asked where this money comes from? Do the booboisie think that there is some magic room in the basement of the Capitol building that is filled with stacks of million dollar bills? Don’t they realize that the magnitude of these amounts is such that even if there were such a thing as a million dollar bill, there wouldn’t be enough room to fit it in? Do they ever teach kids these days about the hyper-inflation of Weimar Germany with the photo of the little old lady pushing a wheelbarrow full of Reichsmarks down the strasse to the bakerei to buy her family brotchen?

Krauthammer points out the truth of the new economic realities here:

Results of Free Money

It’s scary, but it is totally on target. We have effectively abandoned the whole market relationship of supply and demand, risk and reward. The “invisible hand” that more effectively controls the economic scene has been totally removed from the picture to be replaced by the expedience of social engineering and political favoritism.

When you read Krauthammer’s piece pay attention to his example of Chuck Schumer (D-NY) and the auto industry. The powerful senior senator from New York doesn’t care what the market wants in an automobile. He doesn’t consider what the people can pay for their transportation. He doesn’t apparently recognize that in the heartland there are a lot of folks who couldn’t complete their daily commute before their government mandated Volt expends its total charge. The plan he demands for a Detroit auto maker’s bailout totally ignores the market and imposes unrealistic desires in some sort of enviro-whacko’s wet dream.

The simplest and most effective solution to the current economic crisis is not more government regulation. It is laissez faire. It is a return to the belief that the free market works. Let companies choose what products they will build. Let them do their own market research and see if they can offer what the public will buy. Let them negotiate with workers to offer a wage that the workers will deem acceptable and which allows the company to make a profit. Let innovation, risk and creativity be rewarded, not by government handouts, but by market success. Let failures be punished by failure, not rescued by political intervention. If no one needs a buggy whip, let the company go out of business or redirect their efforts.