by Thomas Long
National News / Economic Correspondent
Stock markets all over the world have not been doing well over the past few months. The DOW is down 12% from its highs, and many economies around the world are suffering. Can this, like the 2008 financial crisis, be attributed to “Capitalism” or the “free market” or laissez-faire economics? Many may say that yes, but this is an irrational viewpoint. No country, not even the US, has a free market that is devoid of extreme regulation and interventionism. This financial meltdown is caused by central banking and by Keynesianism. Keynes believed that government taxation and intervention into the economy was beneficial for the country as a whole. This idea is used by every government in almost every country across the world. The US now has the largest government the world has ever seen, and it intervenes in the economy more than ever before.
The Federal Reserve has created a stock market and demand bubble. The Federal Reserve prints money and artificially stimulates demand in the economy. This is like snorting cocaine. It is great for a very short period of time, but it is horrible for the long-term health and growth of the economy. The Federal Reserve has also kept interest rates at basically 0%, which, again, causes artificially high levels of demand and investing. These two things create a bubble in the economy itself. The State and the Federal Reserve have also done a lot to herd money into the stock market. If money is not put into the stock market, through a 401K or another retirement program, it is taxed by the State. This, of course, triggers people to herd their money into the markets for a higher return without doing any research. The Federal Reserve itself buys futures contracts that push the markets up, and this is all done through debt.
The US government has a monopoly over the money supply, gives corporate bailouts and subsidies, sets wages, regulates heavily, and redistributes wealth by force. The 2008 financial crisis and the present bubble in the economy were not caused by freedom. This was caused by Keynesianism and by the irrational idea that government is competent and that this entity should control and economy.