PRESS RELEASE: FOR IMMEDIATE ISSUE: September 26, 2008
Libertarians say NO to Bailout
The Libertarian Party of Michigan is urging congress to “just say no” to the $700 billion bailout package.
“Added to the bailouts of Freddie, Fannie, and AIG, the taxpayer is being asked to kick in over one trillion dollars”, said Will Tyler White, congressional candidate for Michigan’s 8th district. “That is not only unconscionable, it is unconstitutional” he continued. “Congress is prohibited from creating money out of thin air”. (Paper currency that is not redeemable for something of substance, like gold or silver, is known as “fiat money”. The Libertarian party began as a response to the removal from the gold standard and the use of price/wage controls by President Nixon in 1971).
“Congress created the Federal Reserve and the two home-mortgage giants, then allowed them to run wild, with the Fed’s encouragement. It is foolhardy to think that Congress and the Fed can fix the problems they created”, said White. “They are following the same type of policies that caused the great depression of the last century”.
Using fear mongering to push their proposals through, the establishment has spared no effort to convince John Q. Public that it is in their best interest to rescue the financial gurus who gambled with other people’s money. Ever-increasing and more exotic investment schemes like derivatives are passed from one institutional investor to another like a shell game as they take their cut and sell it to the next grafter. Sometimes, they make money on just the point spread - like a sports game. If they beat the interest rate spread, they win. If it becomes too risky, they pass it on to another entity. When the deal finally goes sour, the last one holding the bag loses. The institutions and investors that gambled away their equity should be the losers, and not the taxpayers.
As for the dire warnings about not being able to get a loan to buy a car or mortgage your house, or send your kids to college -- guess what? A great number cannot do that already. Many in the middle class and those in poverty have been living with that situation for years. Cars are purchased from a friend or a used car lot that will finance it. Buying a house on land contract from the owner is standard practice. Most college students work to pay some of their tuition, and they increasingly attend less expensive community colleges.
The “economic meltdown” may scare some of those in the top income brackets, but for a great number of Americans it is a case of “been there, done that”. They will survive. If great financial institutions fail, so be it. Maybe they are too big. Maybe they are no longer needed or desirable. The school of Austrian economics holds that a nationalized bank with central planning is detrimental to the market economy (remember the Soviet Union?).
The economy is ultimately created from the bottom up, not the top down. A farmer sells bacon and eggs to the local cafe, and takes his profit to pay a carpenter to fix his roof. The carpenter takes the money to buy shingles from the hardware. The hardware store owner uses the cash to buy breakfast at the cafe, and the cafe buys more bacon and eggs from the farmer.
Individuals create communities that in turn create civilization and wealth. Unfortunately, many financial institutions have become parasites that consume that wealth instead of helping create more of it. It is far past time to reign in the speculative gambling of institutional investors and prohibit trading in newly invented paper securities that are without substance.
Polls show the public is fed up with the direction this country is going. Continuing those failed policies is a recipe for continued failure. If the electorate can see past the tunnel-vision rhetoric of the establishment politicians and media, they may embrace the Libertarian message that there is another way - individual responsibility and real money.
