Stop Blaming Capitalism, for Socialism's Failures

[Chris Rice]

HMOs, the health care crisis, strip mining, robber barons, deforestation, SUVs, "global warming", world hunger, unemployment, inflation, periodic recession/depression...what all have in common is that Big Government is the cause, but your economic freedom is blamed.

Politicians tend to force bad government programs on us, which then have destructive side-effects, usually the opposite of what's intended, and then saying the effects were caused by whatever freedom of choice is left over, and trying to take that away.

Included in the list of such failures:
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* The Housing Market / Sub-prime Mortgage Bubble:
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The Federal government set up two massive lending institutions Fannie Mae and Freddie Mac (the F in each name stands for Federal), which they then ordered to hand out money for home loans to people who couldn't possibly afford them, and ordered to overlook the government's own minimum standards (like the 80%/20% subprime lending trick). When this caused the present failure...the tiny remaining freedom in the banking industry was blamed.
http://www.forbes.com/opinions/2008

/07/18/fannie-freddie-regulation-oped-cx_yb_0718brook.html
http://mises.org/story/2963
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* HMOs:
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The horrible health care "insurance" HMO companies were originally tried in the free market, and failed. So in the mid 1970s they went to Congress, and had the government FORCE employers to provide HMO coverage, saving a movement that should have died. We suffer with horrible HMOs to this day, because of that.
http://en.wikipedia.org/w/index.php?title=HMO#History
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* SUVs:
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People complain about the popularity of Sports Utility Vehicles, which are large and use more gasoline...but it's the government's onerous control of the automotive industry that created this popularity. Their gas mileage and emissions laws forced companies to make cars so small, light, and weak-engined that they were useless for many families. But they HAD to allow some larger, more powerful vehicles, for sporting and work purposes, so they created the SUV category. This forced anyone who didn't want a smaller, underpowered car, or to pay insane prices for a luxury car, to buy a huge, heavy SUV, even if it's simply for hauling their children to soccer practice.
http://en.wikipedia.org/w/index.php?title=SUV#Origins
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* The Savings and Loan Bailout:
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After generations of ridiculously tight control of the banking industry, causing the few remaining companies in it to be clumsy and outdated, and run by incompetents. The Federal government then INCREASED the number and kind of regulations, but called it "deregulation", producing a complicated new category of bank that had a special safety net, insulating it from responsibility OR consumer control, called the Savings and Loan, and staffed with the bumblers from the old banking industry. This, of course, eventually failed, and the economy was additionally damaged by billions of dollars in bailouts that should never have happened, just like today.
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* Bailouts:
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In fact, the Savings and Loan bailout helped to set the precedent that led to the current mortgage/finance crisis...each time the Federal government bails out industries on the taxpayers' backs, other industries in the future assume they can do things wrong, and get bailed out in turn.
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* Robber barons, Strip Mining, Deforestation
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Governments insanely hand out free access to land, to railroads, lumber companies, mining companies...rather than making them buy their own. Trillions of dollars of land, which the companies then feel no responsibility to maintain or be responsible for.
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* Corporations
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Modern corporations are not a natural part of the free market, of capitalism. They exist in a way set up by government mandate, and they have powers that no private company has, like management with no legal accountability for their actions. They are a form of socialism, the point is to nationalize a given industry by having it "publicly owned". It's no wonder these quasi-governmental monstrosities become abusive and irresponsible.
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* Monopolies and oligopolies
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Most of the worst monopolies in history, like the original telephone company, cable companies, and the post office, were/are government mandated. The rest, along with oligopolies like US automakers, banks, and food conglomerates, are in industries so heavily regulated that it's effectively illegal for a new company to start up and compete, so as the old ones fall by the wayside, as companies always do, there are ever-fewer of them, controlling ever-larger market shares.
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* Oil / Gas Prices
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The US government not only bans the extraction of almost all of the most accessible oil, so that America, with one of the largest oil reserves on the planet, has to import oil when the few other countries with so much oil export it, but also constantly engages in horrible foreign policies that result in oil futures speculators constantly fearing for the supply, and bidding up ever-higher energy prices.

http://www.facebook.com/note.php?note_id=37095806588&id=3876931...

And do not forget that it's also illegal to build new oil processing plants, to make gasoline...which means that the slightest trouble with existing plants, like one shutting down from old age, or a passing hurricane, drives gasoline prices through the roof even if oil prices are not.
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* Energy Prices
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Even aside from oil, and bans on natural gas (no carbon footprint) extraction in the US, building new nuclear power plants is effectively illegal, even though they can now be built so safe that even a complete failure would simply shut down the plant automatically. This leaves much of the US powered by coal and oil plants.
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* HUNGER
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In the US, the Federal and state governments pay farmers to NOT GROW FOOD, in order to artificially inflate prices. That's what they mean when they say "farm subsidies". They also set minimum prices for food...it's actually illegal to sell milk, one of the most universally healthy and useful foods, below a certain price!

This raises food prices above what the poorer fifth in the US can afford, even though they're more prosperous than the poorest fifth in most other countries. Then the government hands out billions of dollars in "free food", via food stamps, WIC, et cetera. This extra money is, itself, a form of food subsidy, raising the dollars available for food, and therefore causing food prices to increase.

In other countries, governments set price controls on food directly, which destroys the supply/demand system, so that they end up with food shortages...having to beg for food aid from the US, even while their own farms simply sit idle, or worse, actually are EXPORTING food to neighboring countries (that lack price controls) while their own people starve.
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* Automaker Bankrupcy
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Aside from the harm caused by letting an automaker depend on bailouts, as mentioned elsewhere, the laws forcing automakers to deal exclusively with a UAW monopoly, and to comply with ridiculous automotive standards before they're allowed to make a single car of any given model, and many other socialist regulations, make being a competitive US automaker nearly impossible. More importantly, they make the founding of any NEW American automaker effectively illegal, just as similar regulations effectively ban the founding of banks. Without a constant infusion of new blood, it's no surprise that any industry stagnates and dies.

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* Alternative Energy
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The billions given to "alternative energy research" actually are the main reason that things like solar and wind power are nearly useless for real people to use in real situations. ANY time a government monopolizes research, in any industry, it creates a situation where the product isn't something useful and affordable, but instead something expensive and rare...because that's how you obtain the funding. You must, as a researcher, show how expensive your effort is, and how special. There is no profit margin incentive. Profit-seeking is the best tool for creating something useful and plentiful for all.
Kaz Vorpal (St. Louis, MO) (creator)

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