Hornberger's Blog

Hornberger's Blog is a daily libertarian blog written by Jacob G. Hornberger, founder and president of FFF.
Here's the RSS feed or subscribe to our FFF Email Update to receive Hornberger’s Blog daily.

Why Trust Big Brother on Economics?

by

Liberals befuddle me. When it comes to matters of privacy and civil liberties, they correctly exclaim against trusting Big Brother. Yet, when it comes to matters relating to economic liberty and well-being, they take an opposite tact and exclaim that people should have no reservations about trusting Big Brother.

One of the fascinating characteristics of liberals is their ability to maintain opposing views of reality within their minds. For example, they will tell you, correctly, that Franklin Roosevelt’s New Deal revolutionized America’s economic system. It constituted a formal abandonment of America’s free-market way of life and a formal embrace of both a socialistic welfare state and an interventionist, regulated economy. Ever since, the federal government has been growing bigger and bigger and bigger.

Yet, when the economy suffers multiple crises involving banking, the dollar, the stock market, the housing industry, Social Security, and Medicare, liberals immediately exclaim that all this reflects the failure of free enterprise, not the failure of the welfare state and interventionist economy.

One liberal, Jacob Weisberg, even went so far as to make the startling claim that the current financial crisis actually shows that it is libertarianism that has failed. Needless to say, Weisberg’s claim shocked many libertarians, especially those who have been devoting much of their lives and fortunes for the past several decades to the restoration of libertarianism to America.

Liberals have spent a great deal of time addressing the Madoff scandal, which involves a massive fraud committed against thousands of investors. What’s fascinating is that liberals are blaming the scandal on “the free market” or a “lack of regulation” or “bureaucrats asleep at the wheel.”

Yet, hasn’t the Madoff scandal occurred within the context of the regulated economy that has been in existence since the New Deal? Wasn’t the entire point of the regulated economy to ensure that people don’t get defrauded in the financial marketplace? Wasn’t that supposed to be the purpose of the SEC, which came into existence during the Roosevelt years? Isn’t 75 years sufficient time to get one’s act together and to hire bureaucrats who are not sleepy?

Apparently not, according to liberals. It’s all the failure of “free enterprise,” they say, which ironically is the same thing they said during the 1930s when they revolutionized America’s economic system. Of course, never mind that the crisis in the 1930s was caused by the Federal Reserve, a federal agency charged with socialistic central planning of money, and then aggravated by the New Deal’s socialistic and regulatory schemes.

Liberals exclaim against Madoff for creating a Ponzi scheme. That’s the type of fraud in which someone pays off old investors with high returns with the money he is receiving from new investors. Ultimately, people figure out what’s going on and the whole scheme comes crashing down.

Yet, isn’t that precisely what FDR did with Social Security, a socialistic program that liberals continue to adore and support? Liberals continue to steadfastly claim that Social Security recipients are simply receiving the money they have “put into the system.” But isn’t that just a lie and a denial of reality?

Isn’t Social Security just about the finest example of a Ponzi scheme one could ever find? Contrary to popular myth, current Social Security recipients aren’t paid out of the money they “put into the system.” That money is long gone, taken and spent by people who are now dead. Current Social Security recipients are paid out of money that is taken from young people, many of whom could use that money to make payments on their home mortgages or to pay for their children’s college bills. But who cares about them? That’s unimportant to those “love-the-poor” liberals. They just continue steadfastly supporting this massive federal Ponzi scheme and then blame the ever-growing Social Security crisis on “freedom, free enterprise, and deregulation.”

The key to getting our nation back on the right track is to face reality: Government cannot be trusted with our privacy, our civil liberties, or our economic liberty and well-being. The socialistic welfare state and regulated economy that liberals brought into existence in the 1930s is not only founded on immoral principles, the fact is that it has failed, miserably. Crisis after crisis after crisis is the hallmark of socialism and interventionism.

Our ancestors who had brought into existence a system based on economic liberty, free markets, and private property have turned out to be right. How bad do things have to get and how many economic and financial crises do Americans have to undergo before they reject socialism and interventionism and restore the principles of economic liberty on which our nation was founded?

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.