Ayn Rand was right– yet again.

“One of the methods used by statists to destroy capitalism consists in establishing controls that tie a given industry hand and foot, making it unable to solve its problems, then declaring that freedom has failed and stronger controls are necessary.”

—Ayn Rand, 1975

More than thirty years have passed and here we are seeing Ayn Rand proven right yet again.  The government has meddled and meddled and meddled and now we have the result… Instead of letting people fail–as they deserve for making bad decisions– for some reason, the Congress is seeking to allow people to escape the consequences of their actions (or inactions).

The talking chatterboxes on TV blame the free market, Obama blames deregulation, and McCain blames “Wall Street greed”– but none of them lay the blame squarely at the foot of failed welfare statist policies of Congress and the Presidents.

Enough is enough!  Stop meddling and face facts: Bad decisions have bad consequences. Period.

I’d rather suffer “worse” in the short term and recover more quickly than face a decade of Congressional bullhockey.

“The Federal Reserve is not the solution to the crisis, it is its root cause. By keeping interest rates artificially low and inflating the currency, it created the illusion that homes and subprime mortgages were can’t-miss investments.”

“Now, as we bear witness to the wreckage of the Fed’s previous central planning, the solution offered is even more Fed central planning. This is absurd. The way to prevent future credit crises is to get rid of the government’s arbitrary power to determine the money supply and the price of credit, and return to a gold standard.”

–Yaron Brook
Executive Director
Ayn Rand Institute

Hello?  Wake up and smell the coffee– or rather the evaporating value of our fiat currency!  Dr. Brook is right on with his comments.  The Fed needs to go.  With a commodity based currency (also known as the gold or silver standard), the government is fiscally incapable of running debts and financing the welfare state.

I’ve commented before on the need of individuals to live WITHIN their means, so now let me say clearly that I support this at a governmental level, most especially!

Your Choice: A Year or A Decade

The chickens are coming home to roost. The bad choices and all the living beyond our means are about to settle in a new reality–one where the market holds us all accountable for those bad choices.

From the people who bought homes far beyond their means to the folks who thought it was ok to keep refinancing over and over again to get every dime of the housing price bubble into their pocket.  From the people who saw credit cards as if they were cash to the credit card companies who think its ok to charge ridiculous interest rates and to mislead borrowers.

Alas, both Presidential candidates are on board with ideas that will lead to a DECADE of pain instead of a year or so.  If we let all these poorly run companies fail, sure it would be painful–but the pain will pass quickly.  By propping up a FAILED system of intervention and Big Government, we will elongate our pain just as FDR did when his supposed New Deal drastically lengthened the Great Depression.

Make no mistake: Depression is caused by GOVERNMENT meddling in the economy.  Recessions are part of a normal business cycle and represent market corrections to bad choices.  The point is that private companies cannot make enough bad decisions at the same time to cause a Depression.  Only through GOVERNMENT regulation can enough companies be FORCED to go down the same wrong path at the same time.

The answer is simple: Tell your elected officials to STAY OUT OF IT and let the market correct itself.  Thankfully, the market doesn’t really care about your politics–it cares about value and substance.  If a company becomes a useless empty shell with no real value (i.e., Fannie Mae and Freddie Mac) through government intervention, the market knows better than to go there.

As I’ve said before and I’ll say again, if you play in the market you’ve agreed to the risk of investing.  Don’t whine when your 401k goes down in value because you failed to research the companies you chose for investment.  The information is out there: read it.  And if its not there, act like an adult and accept the consequences of choosing an investment that went downhill.