Bear Is Full Of Bull: Analyzing the Economic Bust
By Lisa Richards
September 12, 2011
Who is to blame for the economic crisis that ensued in 2008; the people or Washington? The answer is both—borrowers and lenders who lent to those who could not repay their loans.Washington claims Americans spend too much while saving very little, but if this is true, how can Americans affect the markets when they are not in the power of lending vast sums to the public? Did not the government who borrowed and lent cause the deficit to reach $14 trillion dollars? Washington has laid the blame for economic failure at the feet of the people, claiming history is repeating itself and America is facing another Great Depression, but Washington insisted banks lend to those Americans who cannot afford to repay loans.[1]
If history is repeating itself, it’s not because of tragedy, rather bureaucratic farce convincing people it is perfectly fine for Washington and Wall Street to lend endless supplies of nonexistent money.[2] The government continues taxing and spending in an endless cycle despite failure. Regulations set in place were never applied to control those in power from monetary abuse. It is not for lack of knowledge that Wall Street banks failed, it is, according to Adam Smith, negligence.[3] Smith would be appalled by the economic actions of the Federal Reserve’s excessive decrease of interest rates. Smith warned the world that disproportionate reserves lead to printing a surfeit of cheap money that
“resembles”[4] real currency[5] needed to “…circulate in society…”[6] in order to create solid revenue.[7]
Money…is the only part of the circulating capital of society, of which the maintenance can occasion any diminution in their neat revenue.”
Adam Smith, The Wealth of Nations, 1776
Money, Smith said, is the “…means of which the whole revenue (profits) of the society is regularly distributed among different members, which makes itself no part of [the actual proceed, because] …the revenue (income) of society consists altogether in [the] goods [bringing in the returns], and not the [company or bank loan] that circulates them.”[8] Smith, along with the French Physiocrats,[9] laid the foundation for modern fiscal economics, their theories have proven true but have been ignored by the government that cannot borrow more than it has in the Federal Reserve. The result of lending without sufficient capital backing massive bank loans[10] led to the banking collapse. This “great wheel of circulation” is not the nation’s true “revenue,” [11] the nation’s people, Smith said, create the real wealth. [12] But the people cannot be inhibited from free-market capitalism by irresponsible banks lending to the wrong bearer. If money is to circulate properly and create wealth for the nation, “Monetary excesses,” that cause a sudden rapid increase[13] in spending by banks, must be regulated. Smith did not criticize lending, banks are in the business of “advancing money,”[14] he did articulate the need for sufficient credit to repay initial investments—payments must replace the borrowed value and interest,[15] but this cannot occur is borrowing goes against insignificant stock. Wall Street lending houses did not “…comprehend the whole original capital of…bank…” deposits. They lent big and retained small, the opposite of what Smith taught:[16] enormous loans means borrowers must earn more in order to refund interest along with what is originally afforded.[17]
America’s prosperity was created by men who understood Adam Smith’s philosophy: when pecuniary management is balanced properly, a nation prospers. There must also be free trade, freedom to spend; spending necessitates proper management of expenditures.[18] Smith explained that if a nation’s “consumption”[19] exceeds that which it produces, the nation is left with “excess:”[20] “If the exchangeable value of the annual produce…falls short of the annual consumption…The expense of the society…exceeds its revenue…[and]…must necessarily decay…[along with]…the value of the annual industry.”[21] In America’s case, industry fell with the banks. Adam Smith would say the excess was caused an expense valued on paper money lacking dollar value and the original government standard, gold, what Smith called “the balance of trade.”[22] Gold is no longer the official backing of funds, toxic assets are.[23] Without such criterions as the benchmark commodity to trade, society becomes restricted in revenue production,[24] and this effects imports and trade.[25] Today’s government does not follow the economic reason of Smith, nor does it pay attention to modern-day thinkers.
“If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.”
Milton Friedman
The federal government appears to be under the impression Wall Street CEO’s are better at managing the United States Treasury than trained economists.[26] [27] [28] America has over two centuries of proof that bankers and legislators cannot be trusted with the people’s money,[29] yet, despite forewarnings from Adam Smith to Milton Friedman, Washington ignores the experts and continues helping itself to the Treasury. America has gained and lost many times,[30] learning repeated lessons the central government continues committing: monetary stupidity. In truth it is useless to wonder why Washington continues creating and wreaking economic havoc when it is obvious that human nature has proven those with power will continue doing harm[31] as long as mankind exists. It is for this reason economics was invented, is practiced and taught: too often, lack of common sense has been in charge of money and the need for fiscally wise minds analyzing trade and industry is cost effective to society overall. That being said, financiers tend not to listen to the money-wise discussed here: men who forewarned disaster if certain fiscal policies were not implemented, and devised solutions to resolve and repair monetary failure.
When Is It Proper To Lend?
Is there a proper time for nations to lend enormous amounts of money? Smith, as in all questions, had the answer: It is in a time of “…public calamity…”[32] (9/11 and the 2003 Gulf War), that banks must lend. “…In such emergencies the bank…would break…the ordinary rule of making payment only to holders of receipts…who had no bank money…”[33] Smith noted[34] that nations must fund the military in times of war.[35] When then would Smith advise us not to lend? “Some nations have given up the whole commerce of their colonies to an exclusive company, of whom the [nation was] obliged to buy…and to sell…as cheap as possible.”
Adam Smith, The Wealth of Nations
In 2008, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Hank Paulson lent banks $125 billion in bailouts claiming it would prevent a banking collapse.[36] Instead of fixing the mess, these men created more government control with tax hikes.[37] The banks were not collapsing; they were stable and were still in the position to be saved.[38] Adam Smith believed banks must have restrictions on small notes, minor banking and lending.[39] Restrictions for bailouts were never set in place to prevent failure reaching the public.[40] The $700 billion[41] lacked federal oversight.[42] The Treasury Department used that bailout money for just about everything other than purchasing troubled assets.”[43] Smith analyzed reckless spending: “The over-trading of some bold projectors in both parts of the [banking sector—Wall Street and Washington], was the original cause of this [modern-day] excessive circulation of paper money.”[44] Smith warned never to “advance” more than we could repay or we would be unable to reimburse:[45] “If the paper money which the bank advances never exceeds [the value of credit on that which is borrowed], it can never exceed the value of the [loan].[46]Smith was critical of excessive lending, it places everyone under restrictions, impairing the nation, causing unemployment[47] [48] and government control. [49] Reckless banks create worthless money and assets. Adam Smith was clear: paper does not have the value of gold and silver.[50] Paper has use, it is easily carried, but paper lacks value to those holding loans.[51] Smith warned: “Had every particular banking company always understood and attended to its own particular interest (instead of buying and lending to those who cannot repay), the circulation never could have been overstocked in paper money.”[52] Therefore, the Fed should not lend unless disaster incurs. Adam Smith made these recommendations over two centuries ago, mistakes have proven his analysis correct.
Responsible people understand the freedom with which capitalism creates; it is a great conscientious duty.[53] Irresponsible people and banks cannot be entrusted with vast sums of money otherwise capital becomes a reckless object that harms the economy.[54] Adam Smith and Milton Friedman warned that “irresponsible government tinkering”[55] by the legislature[56] occurs without implemented rules.[57] Milton Friedman stated in Capitalism And Freedom: “So long as effective freedom of exchange is maintained, the central feature of the market organization of economic activity…[58] protects sellers, buyers, employers, and the financial system, while sustaining “The existence of a free market…”[59] and protecting all from “threats” of those in power who would seek to “eliminate” the free market.[60] It is an unfortunate occurrence when the free market becomes a pawn in the hands of the Treasury. Excessive borrowing and lending occurs and disaster ensues as seen on Wall Street.[61] Rules are set in place to prevent corruption from abusing money. If the rules set in place applied to legislature and the Treasury begins to apply only to the people, Friedman told us the powers in charge will become responsible only to themselves[62] without the discretion government places on free people.[63] It is because of this underlying principle that Milton Friedman believed the government must stay out of the way of capitalism and the people or the free markets will become collective agencies devised to control people, preventing competition and liberty overall.[64]
Adam Smith said “Money… [is] the great wheel of circulation, the great instrument of commerce…of trade…and a very valuable part of the capital” of the nation as a whole.[65] Employees, employers, buyers, sellers, all contribute to the economic growth[66] that must not be tampered with by government or society pays the high price of losing economic freedom.[67] Smith believed in free market capitalism, he understood the need for people and industry to compete[68] in order for the economy grow and prosper.[69] People must be free to produce and generate,[70] profits must be allowed to grow, and failure must also be allowed.[71] Failure must not be intervened; it must be permitted and allowed to recover without interference from government.[72] Government meddling prevents recovery while creating deficits and inflation through excessive lending.[73] [74]
Capitalism, Milton Friedman believed, is economic freedom[75] that can be lost when banks abuse power, as they so often have. Adam Smith said there must be certain restrictions placed on banks in order to secure monetary freedom lasts.[76] Both men believed in restraints placed on government. Both believed the freedom capital affords the people cannot be taken from them or panic ensues.[77] [78] Crisis have occurred century after century because lack of government discipline occurs in banking institutions, while limitations for control are placed heavily upon the people.[79]
Government restraints, once again, proved a great failure.
Adam Smith criticized excessive lending because it places every citizen under restrictions, impairing the nation that can no longer “…employ to maintain…productive hands…maintained by revenue…”[80] Milton Friedman said “The viscous cycle [of lending], if allowed to proceed [too far], grows on itself as…banks…force down…the prices on securities, render[ing] banks insolvent…”[81] to the point the economy crashes.[82] These statements are so simple, yet widely ignored by those entrusted with the nation’s capital. A free market does not mean money is free to take from the people and distribute it among governments for bailing out bad banking. It is the limiting of government in our monetary affairs that is essential to economic freedom. The free market cannot exist unless power is limited to government and granted to the people.[83] People must be free to spend their money as they wish, make mistakes, learn by their errors, without government restricting freedom, because government assumes it knows best how to spend and distribute the people’s money.[84] [85]
Both Adam Smith and Milton Friedman highly regarded free-thinking and the individual, believing people are more capable of maintaining the monetary system without restraints placed on them, their business and finances. Both men believed, and would agree today, if we could interview them, that it is the government which needs restraining and removing from the private affairs of the people, as well as Wall Street.
Karl Marx Believed the Problem Capitalism Creates is Labor Pains
“The wealth demanded by nature is both limited and easily procured: that demanded by idle imaginings stretches on to infinity.”
Epicurus
Karl Marx probably would not call regulation the failure in today’s markets, rather claim that capitalism itself caused the markets to decline:[86] Marx said the wealthy ignore crisis by “denying” a “catastrophe” exists. They do this, Marx said, by insisting “production” can continue as it is and eventually the crisis will repair itself.[87] Perhaps this specific analysis is correct when judging those certain individuals in charge of the Federal Reserve: they continued to lower interest rates, insisting all was well with the economy, thus encouraging Americans to borrow and buy when in fact the government simply created toxic assets—Fannie Mae and Freddie Mac’s buying up and reselling housing loans to those unable to afford housing mortgages. Marx went one step further in criticizing capitalism and economic crisis: “In order to prove that capitalist production cannot lead to general crisis, all its conditions and distinct forms, all its principles and specific features…are denied.”[88] In other words, if a crisis is ignored as if it never happened and spending goes on as usual[89] until too much is produced, there will not be enough money to purchase[90] because, if the buyer cannot pay for the supply he demanded, the supplier cannot pay his bills, and the cycle becomes a vicious crisis.[91] Oddly, this is the Marxian economy of those on the left who over-lent and borrowed too much.Therefore, Marx would not view today’s debacle as overproduction since he stated that society has needs it wants met that will never be satisfied: only that which is urgent is met, therefore, “under-production” is the outcome of society’s needs. It was always capitalism in Marx’s view that actually limited the supply of all needs being met.[92] Smith and Friedman would no doubt disagree. Marx’s analysis would probably agree that the Fed over-printed money, created heavy supplies used to purchase that which many could not afford when money ran out. Marx would also say the wants by many were not urgent needs, but capitalistic fancies created by society that cannot admit its desires: this he would claim leads to failure.[93] Adam Smith and Milton Friedman might give credit on this particular analysis simply because both were critical of excessive lending by government banks: it places everyone under restrictions, impairing the nation, causing unemployment[94] [95] and government control. [96] But it was not capitalism but reckless banks and those they lent to that created worthless money and assets. Adam Smith criticized excessive lending because it consigns every citizen under restrictions, impairing a nation that can no longer “…employ to maintain…productive hands…maintained by revenue…”[97] Friedman said the government uses economic growth as an excuse “…for widening the extent of government intervention in economic affairs.”[98] This however does not make any claim that Smith or Friedman were at all of similar thinking to Marx, they were not, it is simply that government banking abuse is something all economists have warn against since time began.
Karl Marx’s social economic views would deem the current economic failure as a “social responsibility” to society, but as Milton Friedman pointed out, that is not true: the responsibility in business is to create wealth by using resources that produce profits.[99] Gained profits must be restricted from “fraud” or free market competition suffers.[100] The “social responsibility” beliefs of Marxism cannot create wealth, nor can they recover a failing economy: “Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.”[101] Marx would view Friedman’s theories as exploitation of labor. Friedman would simply point out fact: throughout the twentieth century (and 2009), government expenditures failed “to eliminate unemployment” and caused an economic depression. Fed regulation of capitalism and spreading of wealth through government [102]spending and lending bleeds society and creates inflation.
Again, Marx would blame the current bank failures on capitalism, claiming it created inequality amongst Americans. Friedman on the other hand would point out that capitalism and the inequality of wealth versus non-wealth is not a crisis that creates poverty, government overspending is. Friedman’s analysis would lay blame to this particular theory on Marx, an economist he considered misled in his “distinguishing short-run from long-run inequality.”[103] Adam Smith would agree with Friedman with his statement that money is that which enables productivity to circulate through society and create wealth from one’s creativity. It is money that must be used for trade; money is commerce, without there is nothing to trade for income growth.[104] Employees, employers, buyers, sellers, all contribute to the economic growth[105] that must not be tampered with by government or society pays the high price of losing economic freedom.[106] Smith, like Friedman, believed in free market capitalism, both understood the need for people and industry to compete[107] in order for economies to grow and prosper.[108] People must be free to produce and generate,[109] profits must be allowed to expand. Failure too must also be allowed.[110] Failure must not be intervened; rather permitted and allocated with recovery without interference from government.[111] Government meddling prevents recovery while creating deficits and inflation through excessive lending.[112] [113]
Unlike Karl Marx, Adam Smith and Milton Friedman highly regarded free-thinking individuals, believing people are more capable of maintaining monetary systems without restraints placed on them, their business and finances. Both men understood, and would concur, if we could interview them today, it is government which needs restraining and removing from the private affairs of the people, as well as Wall Street.
The Paper Smith Got Jammed
The banking debacle goes against The Wealth of Nations monetary rules: “…if the current money of two countries (or in the case of lending houses)… [are] near to the standard of their respective mints (currency), and that one pays foreign bills in this [American] currency [whose rate dropped considerably]…while the other pays them in bank money [owned by investors]…the computed exchange may be in favor of that which pays in bank money… [but] the real exchange… [will] be in favor of that which pays in current money…better money…nearer its own tandard…”[114]
The best currency is that of the wealthiest nations.[115] If mass produced notes become plentiful, and recklessness spending develops, banks must repay “regardless of the [money’s] condition.”[116] We were warned; paper money only “…replaces a very expensive instrument of commerce with one less costly…,” [and the value of the loan remains in the natural state of gold, because interest is actually the gold price], “…requir[ing]]…further explication [to the borrower].”[117] It must be noted that Adam Smith was not against paper currency,[118] he considered it an inexpensive but equal, form of replacing heavy coins.[119] Paper money must remain of equal value in order to promote monetary growth.[120] Money is like a lottery: the chances of wealth are low and risk great, the actual gain, more often, is losing.[121] Smith said the loss was too often undervalued:[122] “How little the fear of misfortune is then capable of balancing the hope of good luck…”[123] We forgot profits are not equal to wages (dollar value)?[124] Perhaps we need to seek answers in the book that laid the groundwork: The Wealth Of Nations.
What Would Adam Smith Do?
Excessive lending happened and now it must be remedied. Adam Smith explained how to avoid monetary crisis: do not over extend credit. He described how America became wealthy: “Bank money,”[125] gold and silver, “true money.”[126] Today we borrow on the falling dollar. Smith can only remind us that loans and receipts as credit will expire and become worthless quickly. Paper does not “comprehend the whole original capital of the bank” no matter how large the sum of the loan ($125 Billion). That paper becomes useless because it is not gold, it is not tangible[127] Smith would say America’s banks exceeded interest without credit[128] and the only way to remedy the problem is to fix the problem by stopping the excessive printing and lending and “…attend to the interest of trade…”[129] by not continuing down the same path taken in 2008. Smith would analyze the 2008 fiasco as arrogance: to assume calamity never erupts from reckless behavior is supercilious pride caused by
“The over-weening conceit which the greater part of men have of their own abilities, is an ancient evil remarked by the philosophers and moralists of all ages. Their bank’s] absurd presumption of their own good fortune…The chance of gain is naturally over-valued, we may learn from the universal success of lotteries. The world neither ever saw, or ever will see, a perfectly fair lottery; or one in which the whole gain compensated the whole loss; because the undertaker could make nothing by it…The vain hope of gaining some great prizes is the sole cause of demand [for money]…Adventure upon all the tickets in the lottery, and you lose for certain; and the greater the number of your tickets the nearer you approach to this certainty.”[130]
There are hard lessons to learn from arrogance, but wrongs must be remedied by looking to those who taught us the way to economic growth and prosperity. Adam Smith valued money and free trade, but knew, in the wrong hands, money is lost. We need only go back to Smith’s foundation for answers to recover.Douglass Rushkoff’s: Economic View’s From All Perspectives
Douglass Rushkoff, author of the best-selling book Life Inc.: How The World Became A Corporation And How To Take It Back, would disagree agree with Karl Marx’s anti-capitalism theories. In Life Inc. Rushkoff wrote: “Codling of the weak or overpaid may provide temporary relief to certain individuals…but it only worsens the eventual comeuppance for everyone.”[131] Americans, Rushkoff says, have become too lazy to work for what they demand, thus allowing other nations to control the demanded supply, causing Americans to spend too much while laboring less.[132] Rushkoff’s scrutiny of today’s economy leans opposite of Marx toward Friedman, though Rushkoff does agree that too much emphasis is placed on capitalism and spending it and less on the arts.[133] Still, Rushkoff’s analysis seems to state that too many Americans have simply become too lazy to work for what they demand, thus allowing other nations to control the supply demanded that has caused Americans to spend too much while laboring less.[134] Karl Marx would wholeheartedly disagree with Rushkoff’s analysis that Americans must work and compete for what they want.Rushkoff’s further points out in his book that excessive lowering of interest rates led to the 2008 fallout, giving too much to Wall Street CEO’s and convincing Americans it was okay to borrow mass sums to purchase that which many could not afford to repay.[135] Smith, Friedman, and even Marx, would all correspond on this analysis, because it is true: people borrowed as interest rates dove, when banks collapsed, borrowers found themselves foreclosed on and bankrupt.[136] Rushkoff evaluates the Fed as generating “a supply-side glut of money”[137] that makes capitalism the social order: money, property, homes, and luxury cars. Rushkoff, in only a minor sense believes as Marx did, that too much emphasis on money takes the importance off of human creativity and solely placing it on capitalism.[138] In some sense Rushkoff is correct: if people live solely for money and never attempt to enjoy what they have acquired from that capital, there will be emotional and financial fallout from only working to acquire and never enjoying what one has. Likewise, Smith and Friedman have pointed out, without money there is no creativity, one needs capital to create one’s product, without it there is no gain for the individual or society. Thus, it is not the people’s fault, rather the Federal Government’s over-printing that gave the okay to lend unwisely to the wrong people.
Rushkoff’s critique of the Fed’s actions is correct. Money did not circulate into society, nor did it “vanish;” rather it changed hands among those in charge of the Federal Reserve and Wall Street banks.[139] Lawmakers are to blame for their knowing this and ignoring all warning signs in lieu of “…widespread unscrupulous lending practices…”[140] This study follows exactly what Adam Smith warned: “Had every particular banking company always understood and attended to its own particular interest (instead of buying and lending to those who cannot repay), the circulation never could have been overstocked in paper money.”[141] Money is not the problem in Rushkoff’s view, those who mishandled it are: they disconnected society by placing emphasis on false profits that became loss through bad lending for false needs. Rushkoff calls this particular action greed.[142] Milton Friedman noted it is those in power removing freedom in the markets: “The need for dispersal of power raises an especially difficult problem in the field of money…[143] I am myself persuaded,” Friedman said, “on the basis of…historical evidence, that the difference in economic stability…is in fact attributable to the difference in monetary institutions.”[144]
This view leads to this essay’s original question: are the people to blame for spending money or the government which borrows, spends, and lends to excess?
If We Only Had A Dime For Every Time We Heard Them Say That…
2008 is not the first financial crisis to consume America’s economy. Throughout the 1800’s America witnessed reckless banking that created panic and depressions.[145] Over-printing of paper money is an historical misbehavior of American government.[146] The gold standard did not prevent past crisis, but it was able to regulate power in the hands of the wrong people.[147] That is not to say monetary abuses never occurred, but the American economic and financial system, prior to the Federal Reserve, as a whole, was capable of fixing itself.[148] The creation of the Federal Reserve constructed a greater system of abuse and regulatory failure than even Hamilton’s excessive and secretive central Second Bank. Today’s government is over spending and borrowing beyond that which it does not have.[149] [150] What Is The Solution To The Problem?
Monetary malfunction is caused by excessive reserve spending.[151] [152] Adam Smith warned such actions originate sudden, rapid lending increases that explode economies. Banks are in the business of increasing money to borrowers[153] however, depositories require sufficient credit in order for borrowers to repay initial investments. [154] Friedman agreed: every dollar deposited in banks must be backed by larger sums[155] or public desperation occurs when people see assets dwindling.[156] Smith explained that borrowers need to earn far more than expanded interest on loans in order to refund banks. [157] But what if the government does the borrowing and lending and the people are expected to repay dire government actions? Friedman viewed such exploits as a form of collective distribution banks use to arrange personal investments and governments exercise to achieve distribution of income and the destruction of free market economies.[158] Karl Marx would no doubt see this as righteous distribution to the laborers.Douglass Rushkoff’s personal solution points to the Founders beliefs that government must be limited by the Constitution, states must be constitutionally independent of government control to the extent that abuses such as the present crisis, are prevented: “Corporations [should be] chartered by the states, not by the federal government…” Rushkoff also credits the Adam Smith model: keep the banks and corporations local and free from those monopolies, such as the government, seeking to make profits from the people who should control their own money.[159] Rushkoff agrees with George Washington, who wanted a Bill of Rights protecting Americans from monopolies. The Federal Reserve is a monopoly. Had the Federal Government not been involved in Wall Street, or lowered interest rates through deregulation, America would not be witnessing another economic depression.[160]
Milton Friedman’s advice for fixing economic crisis: remove government from free markets, allow the markets to fix themselves:[161] “The only way that has yet been suggested that offers promise [to fix financial crisis] is to try to achieve a government of law instead of men by legislating rules for the conduct of monetary policy that will have the effect of enabling the public to exercise control over monetary policy…”[162] British socialist economist John Maynard Keynes said that during the early part of the nineteenth century, nations were not in debt to one another, not even the United States, which today is in debt to China. Keynes pointed out that the first fifty years of the twentieth century led to heavy borrowing and lending, placing burdens on nations recovering from the Second World War. Yet Keynes was a socialist who believed in spending one’s way out of debt. Thus, during the early period of the Twentieth century, financial assets were real and tangible until Keynesian Economics came into the picture. Bankers of the early Twentieth Century, like John Maynard Keynes in philosophy, believed borrowing and lending “…to be a necessary part of the permanent order of society…that a comparable system between Governments…represented by no real assets…is natural and reasonable and in conformity with human nature.”[163] This Keynesian belief has proven terribly false.
Where Do We Go From Here?
There is always a solution as noted above. The answer to who is to blame is the government, the banks and those unable to afford the loans given them. The solution is free markets and capitalism must be placed back in the hands of the people. A lack of government interference works best, but getting government out of the way of the people is not an easy task and finding the answer to the how is up to the people and who they place in power.Citations
[1] Thomas Sowell, The Housing Boom and Bust, (New York: Persus Books Group, 2009), 30-31. [2] Thomas Sowell, 32-33.
[3] Adam Smith, The Wealth Of Nations, (New York: Bantam Classics, 2003), 376.
[4] Smith, 376.
[5] Smith, 376.
[6] Smith, 367.
[7] Smith, 367.
[8] Smith, 378.
[9] Thomas Sowell, Intellectuals and Society, (New York: Persus Books Group, 2009), 50.
[10] Thomas Sowell, “Jolting the Economy: Does our economy need it? And…will it help?,” National Review Online, November 25, 2008, http://article.nationalreview.com/?q=OGVhZTIyYTk2OGZiMmUyYmYzZTJiMjA4ZGU5M2ZkMWQ=
[11] Smith, 371.
[12] Smith, 371.
[13] John B. Taylor, “Getting Off Track: How the Government Created and Prolonged the Financial Crisis,” Hoover Digest, No. 3, (Summer 2009): 9.
[14] Smith, 381.
[15] Smith, 381.
[16] Smith, 609.
[17] Smith, 609.
[18] Smith, 626.
[19] Smith, 626.
[20] Smith, 626.
[21] Smith, 626.
[22] Smith, 693.
[23] Dr. Thomas Sowell, “Sadder But Wiser: For the ‘victims of the foreclosure, an overdue case of live and learn,’” Hoover Digest, No. 3, March 10, (2009), 26.
[24] Smith, 693.
[25] Smith, 693.
[26] Robert Schmidt, “Geithner Aides Reaped Millions Working for Banks, Hedge Funds,” Bloomberg.com, October 14, 2009, http://www.bloomberg.com/apps/news?pid=20601087&sid=abo3Zo0ifzJg
[27] Deborah Solomon and Dan Fitzpatrick, “Pay Czar to Slash Compensation at Seven Firms,” The Wallstreet Journal, Business, October 22, 2009, http://online.wsj.com/article/SB125615172396299535.html
[28] Bob Chapman, “U.S. Treasury Controlled by Wall Street: Geithner’s Kitchen Cabinet,” Global Research: Center for Research on Globalization, October 19, 2009, http://www.globalresearch.ca/index.php?context=va&aid=15729
[29] Thomas Jefferson, Jefferson: Writings, Letter to John Wayles Eppes, June 24, 1883 (New York: The Library Of America, 1984), 1282.
[30] Milton Friedman, Capitalism And Freedom, (Chicago: University of Chicago Press, 1982), 43.
[31] Friedman, 39, 51
[32] Smith, 610.
[33] Smith, 610.
[34] Smith, 611.
[35] Smith, 884.
[36] Sean Lengall, “Study: Bernanke, Paulson Misled Public on Bailouts,” The Washington Times, October 5, 2009, http://www.washingtontimes.com/news/2009/oct/05/report-bernanke-paulson-misled-onb...
[37] Lengall
[38]Lengall
[39] Smith, 420-21.
[40] Smith, 420.
[41] Niall Fergusson, “Borrowed Time: People must abandon the mad idea that they can borrow their way back into solvency,” Hoover Institute, No. 3, (2009), February 6, 2009.
[42] John B. Taylor, 12.
[43] “Tarp Bailout: How was The $700 Billion Spent?,” American Banking News, August 21, 2009, http://www.americanbankingnews.com/2009/08/21/tarp-bailout-money-how-was-the-700-billion-spent/
[44] Smith, 387.
[45] Smith, 387.
[46] Smith, 387-88.
[47] Smith, 425.
[48] Smith, 426.
[49] Smith, 427.
[50] Smith, 33-42, 382-383.
[51] Smith, 383.
[52] Smith, 385.
[53] Friedman, 1.
[54] Smith, 384.
[55] Friedman, 51.
[56] Friedman, 51.
[57] Friedman, 53.
[58] Friedman, 14
[59] Friedman, 15
[60] Friedman, 15
[61] Washington Examiner, “Examiner Editorial: Uncovering the bull under the bailout,” Opinion, October 23, 2009, http://www.washingtonexaminer.com/opinion/Uncovering-the-bull-under-the-bailout-8426220.html
[62] Friedman, 53.
[63] Friedman, 54.
[64] Friedman, 2-3, 11, 162, 195, 198, 200-202.
[65] Smith, 371
[66] Smith, 371.
[67] Smith, 435.
[68] Smith, 79-80, 519-520.
[69] Smith, 33, 43, 79-84, 122, 451.
[70] Smith, 519.
[71] Smith, 44, 47, 451
[72] Smith, 79-85, 483, 549
[73] Smith, 549, “Upon every account, therefore, the attention of government never was so unnecessarily employed, as when directed to watch over the preservation or increase of the quantity of money in any country.”
[74] Smith, 553
[75] Friedman, 9
[76] Smith, 420
[77] Smith, 420
[78] Friedman, 11
[79] Friedman, 53
[80] Smith, 425.
[81] Friedman, 47.
[82] Friedman, 47.
[85] Smith, 421.
[86] Karl Marx, The Marx-Engels Reader, “Crisis Theory,” ed. Robert C. Tucker, (New York: W. W. Norton & Company, 1978), 443.
[87] Marx, 443.
[88] Marx, 444.
[89] Marx, 445.
[90] Marx, 448. Marx criticized David Ricardo’s theories that too much can be produced and sold, saying Ricardo was in denial “of a general glut in the market.” Ricardo believed if there was demand, there ought to be supply. Marx disagreed on page 449.
[91]Marx, 453.
[92] Marx, 459
[93]Marx, 459
[94] Smith, 425
[95] Smith, 426
[96] Smith, 427
[97] Smith, 425
[98] Friedman, 36
[99] Friedman, 133
[100] Friedman, 133
[101] Friedman, 133
[102] Friedman, 75
[103] Friedman, 168
[104] Smith, 371
[105] Smith, 371
[106] Smith, 435
[107] Smith, 79-80, 519-520
[108] Smith, 33, 43, 79-84, 122, 451
[109] Smith, 519
[110] Smith, 44, 47, 451
[111] Smith, 79-85, 483, 549
[112] Smith, 549, “Upon every account, therefore, the attention of government never was so unnecessarily employed, as when directed to watch over the preservation or increase of the quantity of money in any country.”
[113] Smith, 553
[114] Smith, 602.
[115] Smith, 602-603.
[116] Smith, 603.
[117] Smith, 372.
[118] Smith, 377.
[119] Smith, 377.
[120] Smith, 372-375, 377-383.
[121] Smith, 149.
[122] Smith, 150.
[123] Smith, 151.
[124] Smith, 154.
[125] Smith, 604.
[126] Smith, 603.
[127] Smith, 609.
[128] Smith, 392.
[129] Smith, 603.
[130] Smith, 149-150.
[131] Douglass Rushkoff, Life Inc.: How The World Became A Corporation And How To Take It Back, (New York: Random House, 2009), 148
[132] Rushkoff, 148-149
[133] Rushkoff, 117
[134] Rushkoff, 148-149.
[135] Rushkoff, 69
[136] Rushkoff, 69
[137] Rushkoff, 69
[138] Rushkoff, 69-70
[139] Rushkoff, 71
[140] Rushkoff, 70
[141] Smith, 385.
[142] Rushkoff, 19-22.
[143] Friedman, 39,
[144] Friedman, 45
[145] Friedman, 43
[146] Friedman, 42-44
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