The Crumbling of a Free Market Economy and a Return to Socialism

Is this really happening? Can the best solution to the recession be increased government spending, and expanding control over private industry? Many of my economic heroes who have come and gone over the years say no. Those heroes including Milton Friedman, Alan Greenspan, Ben Bernake, Reagan, and Ayn Rand, who were all purveyors of the free market system. In Rand’s case, she rejected this dictatorial government attitude after having witnessed the repressed entrepreneurial efforts of her father by the Bolsheviks in Russia. Even she could not brace herself for the current overpowering efforts of the Obama administration and it’s socialist innuendo. Frankly, neither can I.

The free market system saved us in the Great Depression of 1928, and unfortunately we will have to deal with the same feeble government intervention that occurred back when the market crashed in the 20’s, and let the government relearn the lessons of natural laws inherent in the monetary system once again. Arguably, the various forms of capital infusion into the economy have done a sufficient job at cushioning the market free fall that occurred in early 2009. However, was the added liquidity only another new constraint on the markets rebound? In the depression we saw interest rate increases lead to less borrowing, today we see increased credit restrictions that lead to less borrowing. In either case, the Federal debt has ballooned because of the lack of actual cash in the system.

The solution under Obama is to create a more efficient federal budget and reallocate money into government spending programs. The recent earmark studded bill passed by his administration shows us that the liquidity shortage is only a problem on Wall Street, and for the fed under Geitner he will follow Zimbabwe and print more money. I expect that as long as Obama stays focused on his social programs and spending the taxpayer’s money, Wall Street will come back with a vengeance and usurp the nationalizing of private industry the President has in his sights. As Milton Freedman, the greatest purveyor of the free market system stated, “A major source of objection to a free economy is precisely that a group (government) thinks what they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.”

Can we blame Obama for relishing in “hope” we instilled in him with our vote based on his popularity… I don’t think so. Every powerful dictator has started with nationalizing the banking system and then moved on down to the auto, energy, and healthcare sectors. It happened in Russia, Cuba, and recently Venezuela. It seems to make perfect sense if you want to control the whole country, to take away the entrepreneurial spirit of America and replace it with unionized labor and a Government department to run your household.