United Liberty

Ben Bernanke is showing himself to be more of a Big-Government politician than a scientist. In his latest speech, he has tried to defend the actions of his predecessors by claiming that their easy-money monetary policy only holds five percent of the responsibility for the high real estate prices that ignited the boom-and-bust bubble that almost broke the back of the global economy.

According to his analysis, 30 percent of the responsibility goes to what he has been calling the “global savings glut.” The other 65 percent, he says, belongs to the inferior standards of the US mortgage market. Therefore, his argument seems to be saying that if we cure the standards we cure the problem.

He attempts to prove his point by demonstrating through charts that other countries had even looser monetary policy than the US, and yet they did not show a worse real estate boom; therefore, he concludes, loose monetary policy does not cause bubbles.

This sounds convincing, coming as it does from the highest-placed economic academician in the land. But his logic is flawed.

There are two problems with his argument. First, you cannot isolate these particular variables as he has done. To do so is the equivalent of saying Michael Phelps eats a lot, and he is not obese, therefore a high-calorie diet does not cause obesity. (Michael Phelps is the Olympic medalist swimmer who purportedly eats around 8,000-10,000 calories a day. A scientist could probably prove that he also spends almost 8,000-10,000 calories a day in his sports activities.)

On this week’s podcast, we discussed the resolution drawn up by members of the Republican National Committee to “re-establish the party’s conservative bona fides.” Believe it or not, there are some who think I do not pick on Republicans enough, so I thought I would channel my inner xenophobic, pro-war, and socially intolerant Republican and jokingly insert the subtext I infer from their statements.

For my first post at United Liberty, I offer a cartoon about the government’s grand new ideas- I think it’s self-explanatory.

(Click on the image for a larger version.)

Meet my new parents: the U.S. Government. The parallels are astonishing when you think about it. (Forgive my generalities… they are for illustration!)

1. Parents want their kids to be the best: Just like proud moms and dads show up at little league games and fight with other parents, help (or take over) fundraising activities so their kids will “win” by raising the most money, or argue with teachers about grades… we see the U.S. Government assert its authority all over the world - both economically and militarily - so that we can be the “greatest nation on earth”.

The other night I was perusing the national exit poll results. One statistic scared me more than anything. 51% of voters participating in the exit poll answered that the government “should do more” than it is doing today. Wow.

The current Grand Old Party is in despair and acknowledging some need for change. Since the end of the Reagan Administration it has slowly become the “Grumpy Old-White-Man’s Party” with little appeal to individuals outside of its traditional coalition, and even within that coalition there is little enthusiasm. So, most acknowledge there are problems; But what are they? How can they be fixed? These are the questions party insiders and loyalists are already attempting to answer.

What are the Problems?

While the mistakes made by George Bush’s Republican Party are so numerous one could probably never compile a completely conclusive book on the matter, most can be traced to fundamental root causes that desperately need to be identified and purged- below are a few of the broad policy mistakes committed by the Party.