Anything sound familiar?

from The Mystery of Banking by Murray Rothbard:

After the Fed inflation led to the boom of the 1920’s and the bust of 1929, well-founded public distrust o fall the banks, including the Fed, led to widespread demands for redemptions of bank deposits in cash, and even of Federal reserve notes in gold. The Fed tried frantically to inflate after the 1929 crash, including massive open market purchases and heavy loans to banks. These attempts succeeded in driving interest rates down, but they foundered on the rock of massive distrust of banks. Furthermore, bank fears of runs as well as bankruptcies by their borrowers led them to pile up excess reserves in a manner not seen before or since the 1930s…

Before 1929, every administration had allowed the recession process to do its constructive and corrective work as quickly as possible, so that recovery generally arrived in a year or less. But now, Hoover and Roosevelt intervened heavily: to force businesses to keep up wage rates; to lend enormous amounts of federal money to try and keep unsound businesses afloat; to provided unemployment relief; to expand public works; to inflate money and credit; to support farm prices; and to engage in federal deficits. The massive government intervention prolonged the recession indefinitely, changing what would have been a short, swift recession into a chronic debilitating depression. (pg 247-248)

The analogy is not perfect. We are no longer on a gold standard. Federal guarantee of bank deposits has served to stave off bank runs (although protection from bank runs has allowed the proliferation of unsound banking practices which are a major part of the problem.) The specific triggers are different. As a whole, our country is richer with fewer people living at the margin so that it is primarily our wealth and savings at risk, not our survival. Still, it is worth the time to study that era closely, from many angles and many points of view, to help us learn from experience as best as we are able, and hopefully not unnecessarily repeat the painful errors of the past.
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Credit Crisis Solution: SNL Style

I can hear Keynes turning over in his grave.

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On Individual Rights

Why We MUST Invoke Our Individual Rights—Now
By Gen LaGreca

A few of my favorite parts:

1. Our Rights are Unalienable.

They are inherent in our nature as human beings. No government gives us our rights, and no government can take them away.

2. Our Rights are Rights to Take Action.

They are not entitlements to the free goods and services of other people. In a letter to Isaac Tiffany, Jefferson defines liberty as “unobstructed action according to our will within limits drawn around us by the equal rights of others.”

4. The Majority Cannot Violate the Rights of the Individual.

Because individual rights are unalienable, they are not subject to any majority vote.

5. There are No Rights of Groups.

Rights belong to individuals.

6. Our Rights Include the Right to Property.

Without property rights, no rights are possible.

9. Our Rights are Violated Only by Force.

Only acts of physical force or fraud violate our rights. In Jefferson’s Notes on Virginia he states: “The legitimate powers of government extend to such acts only as are injurious to others.”

10. Government’s Sole Job is to Protect Individual Rights.

Wise government, explains Jefferson in his First Inaugural Address, “shall restrain men from injuring one another . . . shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned.” And that’s it. That’s the whole of the job of government...

Giving the practical argument from the inefficiency of a draft is like trying to walk with one leg. Adding the moral argument from individual rights gives us two legs—plus a spine...

Defending any person’s individual rights is scoring a point for all of us. Therefore, we need to be the one non-special interest group that places the individual in the center of the battle for liberty. In each instance in which we want to fight for freedom, we need to ask ourselves two questions:
—1. Whose individual rights are being violated?
—2. What can I say or do to defend them?

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Subsidizing Failure

Bailing out the Big Three is subsidizing failure.

And you only subsidize something

when you want more of it.

--Grant Bosse at NH Watchdog

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Glossary

(Once I figure out how to bookmark and link to each individual term, I will be able to direct you to the specific term referenced. Until then, you'll have to scroll the word yourself.)

Capitalism: the social system in which individual rights are applied to the realm of trade; a social system based on private ownership of the means of production. (Reisman, pg 19) Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned. (Ayn Rand)

Commodity money: money that is a definite physical quantity of a good; Wiki: money whose value comes from a commodity out of which it is made

Currency: a form of money; a unit of exchange. Coins and paper money are two types of currency.

Demand deposit: an account held at a financial institution such as a bank in which the funds placed there are to be available "on demand."

Economics: the science which studies the production of wealth under a system of division of labor.

Fiat paper money: a system where the value of money is not tied to any physical good. It's usefulness arises not from an intrinsic value but from the government order that it must be accepted as payment. In this system, money does not serve as a claim to anything other than itself.

Fiduciary Media: transferable claims to standard money, payable by the issuer on demand, accepted as an equivilant to standard money, but for which no standard money actually exists. An example of fiduciary media is the portion of the money supply held today in checking deposits. Given the current state of the fractional reserve banking system, "money equivilents" are created and circulate in the economy far in excess of the existence of standard money.

Fungibility: Wiki: the property of a good or a commodity whose individual units are capable of mutual substitution. Money is fungible in that one dollar bill can be substituted for any other dollar bill.

Gold Standard: a monetary system in which a region's common media of exchange is gold or paper notes that are freely convertible into pre-set, fixed quantities of gold.

Inflation: an increase in the quantity of money at a rate more rapid than the increase in the supply of gold and silver. In a system of fiat paper money, inflation would be defined as an increase in the supply of money. (This second definition is problematic because of the difficulty of defining what constitutes money.)

Mixed Economy: an economy which remains capitalistic in its basic structure, but in which the government stands ready to intervene by bestowing favors on some groups and imposing penalties on others (Reisman pg 34); an economy based on the private ownership of the means of production but more or less severely hampered by an extensive list of socialistically motivated government intervention (Reisman, pg 264.)

Money: a good readily acceptable in exchange by everyone in a given geographical region and is sought for the purpose of exchange; anything that is generally accepted as payment for goods and services and repayment of debts; that which serves as a medium of exchange, a store of value, and a standard of value. (Note: Wikipedia's definition of money uses "unit of account" instead of "standard of value" which is the accurate phrase to use when defining fiat money. Fiat money can not serve as an objective standard of value, but can serve as a unit of counting.)

Politics (or political science): the science which determines the principles of a proper social system.

Socialism: an economic system based on government ownership of the means of production (Reisman, pg 264); !--[if gte mso 9]> Normal 0 false false false MicrosoftInternetExplorer4 any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy (Dictionary.com)

Standard Money: Money that is not itself a claim to anything further.

Statism: The practice or doctrine of giving a centralized government control over economic planning and policy (Dictionary.com); the political expression of altruism is collectivism or statism, which holds that man’s life and work belong to the state—to society, to the group, the gang, the race, the nation—and that the state may dispose of him in any way it pleases for the sake of whatever it deems to be its own tribal, collective good ( Ayn Rand .)

Wealth: the material goods made by man; also land and natural resources in so far as man has made them usable and accessible.