If you stuck a dollar in a savings jar in 1913 and tried to spend it today, you would find your purchasing power had been sapped. Your dollar would be worth about a nickel. What happened? Well, the government had created an institution called a central bank that was endowed with the power to create money. And create it did: so much so that it diminished the value of all existing currency.
On May 28 President Bush signed into law a $350 billion package of tax cuts and state aid. Millions of Americans will begin to see the effect of the package within weeks, in the form of bigger paychecks. Also, in July some 25 million families will receive up to $400 per child in tax credits.
As the payday lending industry has grown rapidly over the past decade, particularly in lower-income and minority communities, the usual critics of free-market commerce have found yet another capitalist whipping boy ripe for attack.
From time immemorial, monetary statists have proposed what they believed to be the final answer to the problem of currency instability: a world central bank and world currency. This is what Keynes dreamed of when he was instrumental in creating the IMF. And as Ron Paul has long warned, the creation of three great currency blocs (dollar, yen, euro) was only the next step towards the final goal of a globalized system operating under a single authority.
It happens in every bear market and in every crash. Investors get it wrong. Then regulators get it wrong. They look for scapegoats and find the wrong ones.
They whoop up a holy war in the popular press as markets are embraced by a persistent bear. They indict the wrong people. They’re like the Christians in the Bard’s The Merchant of Venice. They hate Shylock for charging interest on loans, instead of blaming themselves for their spendthrift ways.
The tax bills of many American families are falling during a period of exorbitant increases in federal spending due mainly to war and welfare spending. Odd? Not once we discover the record levels of government debt accumulation. It’s the shell game of government finance at work.
How well I recall the debates about the WTO and Nafta, both of which the Mises Institute editorialized against on grounds that they constituted managed trade, not free trade. In the case of Nafta, it was outright regional protectionism. But for dissenting from both sides of the phony DC debate, we were called secret protectionists.
Thanks to the untiring efforts of Bill Clinton and George W. Bush, Americans have been faced with the greatest expansion of the government into medical care since the 1960s. When these moves are complete, the free market in American medicine will be practically gone. Interventionism will be in complete possession of the field of battle, and the task of the government will be to mop up the remaining opposition.
