In the weeks since September 11, the Federal Reserve has zoomed the money supply at an astounding rate--an amazing fact when you consider that the economy has actually shrunk during this time. The demand for dollars has gone up due to higher savings, but not enough to permanently sop up all that extra cash sloshing around the world today, thanks to an incredibly irresponsible policy.
While the politicians and their media allies prattle on about "winners" and "losers" in the Microsoft antitrust case, they miss the larger story, one that has become a typical American tale: the ongoing assault of the Leviathan State upon the once free and productive business sector.
Prior to the Keynesian era, recessions were called panics and had durations of about three months. The shortness in duration reflected the lack of interventionism by extra-market authorities. Today, recessions last much longer, as the bad idea that the state should manage the economy has become legitimized.
The state has a monopoly on higher education, and those who work for it tend, in part accordingly, to favor the state in most every respect. Having higher education managed, ultimately, by the state is one of the most corrupting aspects we find in these institutions.
Some are claiming that the attacks of September 11 triggered this latest economic slide, but all signs indicate that the U.S. economy already was in recession even before the attacks.
The idea that political freedom can be preserved in the absence of economic freedom, and vice versa, is an illusion. Political freedom is the corollary of economic freedom. It is no accident that the age of capitalism became also the age of government by the people.
Presidents assume near dictatorial powers during wars, and FDR was able to manipulate World War II to provide moral legitimacy to his domestic agenda. With the war, Roosevelt could boast of eliminating unemployment at home while fighting evil abroad. Not a bad deal.
Last year, Salon.com announced that it was very fashionable to fry your Thanksgiving turkey, a tip which the truly fashionable regarded as at least 12 months out of date. For those out of the loop — not that it matters now — frying involves injecting the turkey with hot sauce and submerging it in 6 gallons of lard heated to 450 degrees.
When there is a shortage of a good, it is safe to say that it is a result of government incursion into the economy. In the Cipro shortfall resulting from the current Anthrax scare, the likely culprits are FDA regulations and the patent system.
