Spontaneous Order and the Failure of Government

John Stossel lays it all out in this must-see 20/20 special, The Politically Incorrect Guide to Politics.

Sometimes I'm really glad Stossel has the pulpit he does, and this is one of those times. He is probably the most visible libertarian in the mainstream media.

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Your Children Might Be Terrorists!

Downsizer Dispatch

Subject: Spying on Children

On Monday we made the case that had we passed the "Read the Bills Act" and the "One Subject at a Time Act" back in the 90s, the Big Bailout could not have passed last Friday.

If there had been a huge army of DC Downsizers back then, able to achieve universal visibility, and relentless, overwhelming pressure, the government laws, regulations, and programs that have led to the housing bubble and bust could also have been averted.

What was true then, remains true now. The seeds of future disasters are being sown even now, because this is what government does. It creates a crisis, and then exploits the resulting hysteria to gain new powers with which to create even larger disasters. But the cure for this disease also remains the same -- the big army, Operation Everywhere, and passage of "Read the Bills" and "One Subject at a Time."

Here's the latest reason to pass "Read the Bills" . . .

On September 17, the House passed the "School Safety Enhancements Act of 2008."

My first thought was, "The DC Upsizers are at it again!"

My second thought was that the Constitution gives Congress no authority over public safety, except on federal property. This power is left to the states.

But even aside from this, the bill implies something distressing -- that state and local governments are incapable of preserving public safety without Congressional help. But if the states really lack the will and competence to keep schoolchildren safe then they must also be incapable of governing at all. This would imply that, but for Congress, our country would be a nation of 50 Somalias.

This just isn't true.

Economists Protest the Paulson Plan

A growing list of economists have signed a letter in protest of Treasury Secretary Henry Paulson's proposed $700+ Billion Bailout plan.

To the Speaker of the House of Representatives and the President pro tempore of the Senate:

As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:

1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, Americas dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.

Can we downsize the Big Bailout?

D o w n s i z e r - D i s p a t c h

Quote of the Day:
"It's a rather brief bill, with lots of money."
-- Senator Chris Dodd

Subject: Can we downsize the Big Bailout?

Today's message is a complex one. It's pretty clear to us that few politicians understand the financial crisis before us -- particularly their role in creating it. But I have confidence in the ability of DC Downsizers to understand what we write here.

So what about Treasury Secretary Paulson's Big Bailout Plan . . .

Lehman Insolvent as Bankers Balk

As predicted, private bankers refused to take on responsibility for Lehman Brothers trading obligations. In particular, Barclays walked away after Treasury Secretary Paulson (thankfully) refused to place responsibility on the American taxpayer.

Lehman file Chapter 11 bankruptcy this morning and will be liquidated to ensure payments to some creditors.

Lehman Brothers' failure is being billed as "one of the biggest failures in Wall Street history".

Read more

The Rise and Fall of Fanny and Freddie

To truly understand the current housing crisis, and the resultant bailout of Fannie Mae and Freddie Mac, we need to understand the nature of these Government Sponsored Enterprises.

Fed Fails to Calm Turbulent Financial Sector

Many small government proponents and critics of the Fannie and Freddie bailouts have warned of future bailouts. After all, if you bail out one industry, why wouldn't you bailout companies in other sectors that are deemed too big to fail.

Not so fast. It looks like we aren't finished with the financial sector yet.

Does the Government take Donationss?

D o w n s i z e r - D i s p a t c h

Quote of the Day:
"A billion here, a billion there, and pretty soon you're talking real money."
-- attributed to Senator Everett Dirksen

Subject: Can the government save you money by taking donations?

Courtesy of Radley Balko we learn that . . .

* The marble on the Tomb of the Unknown Solider has been cracked and needed replacing for 18 years!
* It cost the federal government $80,000 just to seek bids to do the job
* The total price for the bidding, purchase, transportation, sculpting, and replacement of the marble comes to a whopping $2.2 million

Meanwhile . . .

Kill Fannie-stein and Freddie-stein

D o w n s i z e r - D i s p a t c h Quote of the Day:
"The GSE structure serves to privatize profits and socialize losses."
-- Arnold Kling, The Cato Institute

Subject: Kill Fannie-stein and Freddie-stein

Politicians and bureaucrats have a good sense of timing for announcing bad financial news. The ideal time to deliver bad news is either on a weekend, or when the media is obsessing about other things, like hurricanes, political conventions, and vice presidential choices. So it was this last weekend when federal officials announced their intention to nationalize Fannie Mae and Freddie Mac.

A Government That Serves the People

C4L has posted 545 People, by Charlie Reese, placing the responsibility for our the problems in our federal government where it belongs, and advocating an excellent plan to fix the situation.

Politicians are the only people in the world who create problems and then campaign against them.

Have you ever wondered why, if both the Democrats and the Republicans are against deficits, we have deficits?

Have you ever wondered why, if all the politicians are against inflation and high taxes, we have inflation and high taxes?

You and I don’t propose a federal budget. The President does.

You and I don’t have the Constitutional authority to vote on appropriations. The House of Representatives does.

You and I don’t write the tax code, Congress does.

You and I don’t set fiscal policy, Congress does.

You and I don’t control monetary policy, the Federal Reserve Bank does.

One hundred senators, 435 Congressmen, one President, and nine Supreme Court justices! 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country.

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