Monday, February 6, 2012

Ron Paul: Some Contradictions!

I read an article in the New York Times that made me admire many of Ron Paul's qualities. He is a man of integrity and consistency, both of which are hard to find in a politician these days. His home-spun charm could talk the skin off a Texas size rattle snake. His humble beginnings and lack of an ivy league education is refreshing.

I certainly can relate to his feelings about the military and foreign affairs. We should no longer be the policeman of the world. He believes in free markets and so do I. We both believe the government is too big and too wasteful. We both would like to see income taxes as low as possible, but I would bet he would agree that a zero tax rate is not possible nor would it be wise. There are certain things that only government can do and we would probably have a healthy discussion as to what those things should be. Further, we both agree that we must get the federal budget under control.

What puzzles me about Mr. Paul is some of his views on the economy. He appears to be against all government assistance relative to the economy including bailouts and government assistance in helping the economy recover from a major collapse like we had in 2008. His approach is to let the economy flush it self out and cleanse itself by going through a prolonged self renewal.

As a physician, he takes action to save lives. His hypo-critic oath does not allow him to sit at a patients bedside and let his body "self-cleanse" itself. It is amazing what modern medicine can do. It was not that long ago when doctors practiced blood-letting, draining blood from the body to cure the patient. We now know that does not work.

Just like medicine, the practice of economics has progressed. Sometimes intervention is the best policy. I readily admit sometimes economist, just like physicians, may over prescribe the medicine and for that matter, may even give the patient the wrong medicine. Is this a reason not to go to the doctor?

Mr. Paul, I admire you. Now only if you would change some of your views. I cannot go to a doctor who still does blood-letting.

4 comments:

Anonymous said...

A zero income tax rate worked fine from the founding up to 1913.

How can there be anything that only the government can do? The government is just people, like the rest of us.

The collapse was caused by government intervention. More of the same is hardly the road to recovery. Only the market can fix the market.

rinon said...

the bail outs go to who ever the fed wants them to go to 14 trillion in 07 and 08.

did it help the people no.
did it help special interest absolutly.
did it cause an increase in money supply greatly weakening the dollar yes. did it shrink the middle class yes. did it make the poor poorer yes.

how could you support the Feds bailouts?

Anonymous said...

I'm not voting for Dr. Paul, but he's absolutely correct with regards to the diagnosis. He's close on the treatment, too.

ANY government involvement outside protecting individual liberties will lead to the government picking winners and losers. And, historically (going back to the beginning of recorded history), government has a terrible track record. It may be ok for a generation or two, but government provided security (of any sort) is cancer.

Our government was set up to protect individual liberty from enemies without and within. Today, we have both. Except the enemies within are a cancer. The only way to get rid of it is to excise it.

The 2008 bailout was a mistake. It picked winners (friends of government officials of both parties) and losers (the average taxpayer). The correct solution would have been to let banks declare bankruptcy. It would have been painful, terrible, but we would have rebounded much more quickly (as the historical record shows).

Dr. Paul, and all those who opposed the bailouts were correct in doing so.

Read Henry Hazlitt: http://mises.org/books/economics_in_one_lesson_hazlitt.pdf for one of the very best explanations of government non-involvement in the economy.

Anonymous said...

You have way too much faith in modern economics. Bailouts are the economic equivalent of blood-letting.

How else to explain the lack of results from the bailout effort. The proponents claimed the unemployment rate would not go above 8%. Then it climbed over 10%.

Their response has been "Well, we didn't know how bad the recession was." In other words, they have freely admitted that they didn't know what they were doing, and they didn't know what effect the bailout would have.

Yet the money went to politically powerful interests. Imagine that. They didn't just send money to everyone. It went to friends and family, so to speak. The rest of us get the bill.

The previous poster recommended an excellent book. I recommend spending some time reading posts at cafehayek.com. I also recommend the weekly podcast called econtalk at econtalk.org. There are many podcasts in the archives about the bailouts.