Donald Trump says the presidential election is “rigged.” He’s not wrong. But the biggest problem isn’t the election. Our whole economy is rigged! And it all boils down to government intervention going back more than a century.
It started with railroad subsidies in the 19th century. Then came the Sherman Antitrust Act. Then the Federal Reserve. Then the New Deal, Social Security, Medicare and all the rest — up to and including the EPA, TARP and Obamacare.
It’s not rocket science. The more government meddles in the economy, the more the economy becomes politicized. A free market is not about politics. A free market is about individuals allocating goods, money and other resources to their best possible uses. The law of supply and demand and the profit motive are key factors.
The more government intervenes and subverts these laws of human nature, the more dysfunctional and political an economy becomes.
It wasn’t always that way. Our once great economy rose on the shoulders of people like John D. Rockefeller, J.P. Morgan, and Andrew Carnegie. These men didn’t rise to prominence through politics. They rose to fame by providing excellence and innovation to their customers. The same applies to more recent examples such as Bill Gates and Steve Jobs.
Government intervention has ensured that we would never again have a fully capitalist economy, i.e., an economy with no government intervention other than to protect property rights, uphold contracts and punish fraud. In a private economy, all wealth belongs to those who make it. With profitability comes responsibility. The more money politicians take away from those who earn it, the less responsible the earners become.
Why do you think Wall Street has turned into a reckless casino?
In recent years, we’ve entered an even darker era of government intervention. It started in earnest with the TARP bailouts in the final George W. Bush years. Since Obama came to office the government has become more involved than ever. It’s not just because Obama and the bipartisan Republicrats who run the government are socialists.
It’s also because the government has transferred so many trillions into the economy that it now seems to have legitimacy when it says, “You’re going to do things our way.”
People complain about Wall Street, but Wall Street is the symbol for capitalism. When people denounce Wall Street, they’re denouncing capitalism. But it’s not capitalism that’s killing us. It’s government intervention bent on destroying the last vestige of capitalism.
If government stayed out of where it doesn’t belong, markets would be self-correcting. They would have to be, because consumers and profit makers would pay the price when they made mistakes. And of course they’d be prosecuted if they commit fraud. This is all the government intervention we need.
Government intervention in the economy, as Thomas Sowell and John Allison competently demonstrated in their books, gave us the real estate bubble. Government removes moral hazard from the financial sector by setting government goals and promising to bail out profit-making executives when government policies go wrong. It’s madness.
We should let the people with the most to gain or lose decide what happens. America more or less did that for two centuries, and it worked just fine. It worked far better in America’s first century, before the Federal Reserve, before dropping the gold standard and before instituting things like the progressive income tax, spendthrift entitlement programs and massive regulation.
We should yearn to have growth today like we had back then. But clueless voters might never allow that to happen.
Every four years, we keep hearing about “change.” Incredibly, even Hillary Clinton – the poster child for the status quo — promises change. Everyone wants change, and change certainly sells at the ballot box. This suggests that most Americans sense just how off track we are.
But do they know why?
Sadly, they are so preoccupied with being manipulated and distracted that they can’t see the simple truth: The problem is government’s involvement with the economy. Get government out of the economy, and we’d all be better off. And our individual liberties (free speech, the right to bear arms) would be safer too. Those liberties only get threatened when the economy goes seriously wrong.
And that’s exactly where we are now.
Michael J. Hurd, Ph.D., LCSW is a psychotherapist and author with a private practice in coastal Delaware. He is the author of “Bad Therapy, Good Therapy (and How to Tell the Difference).” For more of his reports, Go Here Now.
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