Our Great Tyranny Machine

How Governments Gobble Up Liberty

It has been said that all bureaucracies set out to solve a problem and thereby serve the public, but, in the end, they end up serving only themselves.  If there are not problems enough to solve, the government can always create new ones.

Our current financial crisis is a textbook example of how government manufactures a crisis and than creates more rules, regulations, and regulators to solve the problem of their making.  More government, less liberty.

It is pretty much agreed that our financial meltdown in 2008 was the direct result of:

1.  Interest rates being kept too low for too long by the Federal Reserve

2.  The Carter Administrations passing of the Community Re-investment Act

3.  The repeal of Glass-Seagull by the Clinton Administration (1999)

4.  Creation of government backed agencies such as Fannie Mae (1938) and Freddy Mac (1970)

5.  Lack of financial oversight by the regulatory agencies that turned a blind eye

6.  Wall Street greed that was encouraged and emboldened by all of the above

Out of the six items above, five were the result of government policy.  These government actions gave Wall Street the encouragement and enough rope to hang themselves, and millions of investors and homeowners along with them.

The result of all this was that in 2007 a family with an income of $50,000 a year could land a $400,000 interest only mortgage with no money down.  An idiot could do the math on this and understand that as soon as interest rates began to move these situations would begin to fall over like dominoes.  Coincidently it all came crashing down one month before the Presidential election.

So now, we face a classic government move of “not wasting a good crisis”.  Ignore the first five causes and go after the easy target: private enterprise, those greedy bastards who believe that enough is never enough.

This week Congress is about to pass a 2300 page  financial reform bill which creates 243 new regulations along with new government employees to enforce these new regulations, and new taxes.  The new regulations are targeted strictly at Wall Street and do nothing to regulate Fannie Mae and Freddy Mac, or to make anyone in government accountable for their actions.  Ironically, this is the Dodd-Frank Bill, probably the two individuals in Congress most responsible for the debacle.  The bill is so flawed and so complicated that there is more legislation forthcoming to “fix” its flaws, and no one has any idea of the impact this bill will have on our financial system. These new regulations are more likely to adversely impact the farmer in Iowa who needs to hedge their crop prices than it will any of the agencies and banks who caused this crisis.  More government, less liberty.

This is just not an Obama Administration issue, although they have taken it to a fine art.  It has been the response from every administration for any crisis the nation faces.  The Great Depression, The Savings and Loan Crisis, Enron and associated corporate scandals of the 1990’s, 911, the list goes on and on.  The crises are all different, but the pathology is the same:  failed government policy (financial or in foreign policy), lax oversight, implosion, new laws and regulation, more government, less liberty.

The chart below is mislabeled.  It should be called The Liberty Chart.  It shows that at the beginning of the Twentieth Century, a citizen of this country was 94% free.  Today we are about 55% free.  In 107 years, we have lost 39% of our liberty.

How have we lost so much of our liberty in such a short period?  It is not the hand of the free market, but rather the hand of intelligent design by people who are elitists and feel they know far better than you how you should live every detail of your life.  They seek a better world brought to you by their superior thought and insight.  They are Hobbesian’s who will gladly sacrifice your liberty for what they perceive as the greater good, while feathering their own nest and insuring their future security in the bargain.

Our next crisis has already been manufactured and is shipping from the factory in the form of un-sustainable debt, promises to push us fully and forever into serfdom.

Next Week: “Fuel for the Machine”