Dear Friends,
It seems to me, the laws of physics, (God’s laws) are inviolate, when someone breaks them and is hurt by the result, the person becomes a victim, of his or her own foolishness. The laws of physics are only one example of this, there are other laws that are equally as inviolate, the laws of economics for example. The elite have been trying to overturn the laws of economics for generations now. Every time they try, millions starve to death, suffering fills the land, families are torn asunder and societies crumble. The people who’s lives are ruined and lost are the victims of the elite’s attempts to violate the laws of economics. The end follows as assuredly as water flows downhill, no matter the intentions or political power, human suffering is always the wage of violating the laws of economics.
Rene Descartes came up with the idea that natural philosophy, (science) should divest itself from all handed down philosophy, and instead measure, observe and interpolate from the observations of the particular to the general. This idea is the foundation of modern science and the scientific method. All the goods we enjoy today that are based in the advancement of science came from this idea. The scientific method makes use of Cartesian logic as did Adam Smith. Both observe events, they measure phenomenon and apply what they had seen to create a general theory. That theory is then tested until it is proven false or stands up to empirical experimentation. Since this is the established method of scientific inquiry, it seems strange that in every area of human endeavor this is the standard, but in the sphere of economics it is eschewed for political expediency.
The empirical examples of the twentieth Century should be sufficient to establish some knowledge of which economic policies work and which do not. Socialism has been tried at least four times in that century. Woodrow Wilson implemented a whole host of socialist ideas, not the least of which is the administrator form of government, a form that lives with us still. His economic policies ushered in a recession that dwarfed the one Obama inherited. Capitalism was said to have failed and was considered of no more value.
Then came the election of 1920 and Warren Harding. He died far too early in his Presidency to make a difference but his Vice President, who served out his term, Calvin Coolidge made a huge difference in people’s lives. President Coolidge eliminated the income tax, he deregulated and cut government spending. The progressives at the Federal Reserve were incensed at these innovations, so they raised interest rates, to undermine President Coolidge’s attempts to improve the economy. As we all know from history books and popular television the 1920’s were roaring. The United States saw a period of GDP growth that has never been equaled by any President before or since.
After the republican progressive Herbert Hoover, destroyed the economy with Smoot Hawley and other socialist programs, Franklin Roosevelt was elected. Roosevelt ran as a Calvin Coolidge cutter. He resided as a progressive socialist however. His policies regulated everything, even sending a man to jail for selling underwear, at a price the government didn’t allow. The result was the Great Depression. No amount of government spending got us out of that period of economic malaise, until the Second World War changed the entire economic paradigm of the World.
The next progressive to wreck the economy was Jimmy Carter. His profoundly misguided economic policies were so crippling the Federal Reserve had to lower interest rates to such an extent they brought on inflation. Carter’s policies of regulate, tax and spend exacerbated the inflation and the Federal Reserve was forced to raise interest rates to keep up with inflation, and we got the term, stagflation.
The only other attempt to follow the laws of economics was Ronald Reagan. He took the bull by the horns and deregulated, cut taxes and tried mightily to cut spending, but with a democrat House and Senate, cutting spending was impossible. Paul Volcker wrested inflation down, and the 1980’s became another time of high economic growth. I recall MacDonalds was offering $9.00 an hour to start! Given the dollar has lost more then 50% of it’s purchasing power since then, that is equivalent to $18.00 an hour today!
Lastly we have the example of Obama, the taxer, regulator and spender of epic proportions. Obama immediately implemented a whole host of spending to get the economy going in the face of a recession, he raised taxes and continues to do so, to balance the budget and his regulations have no peer in the history of the United States. Obama’s policies are in direct contrast to President Coolidge’s as are the results. Now we have another time that is called great… the great recession.
Today many are saying that capitalism simply doesn’t work. They are called geniuses and sages by the unbiased media, yet history, empirically observed, proves them wrong. If I have a car and I put sugar in the gas tank, is it logical to argue that the automobile cannot work? If I did put sugar in the gas tank… I would be the victim of my own foolishness and not of any malign intentions of the car… or of physics. Is an economy any different?
Sincerely,
John Pepin
