American Economy On The Brink: Beef Suffers

Beefs and Beliefs

This election season brings to the forefront a decisions about whether to let government keep growing.

Published on: July 19, 2012

There's a old story about a man caught cheating on his wife. He retorted with this illogical defense: "Who you going to believe: Me or your lying eyes?"

I believe that's where we are today in this presidential and congressional election season and all the related talk about the economy.

It has long irked me that people blame the president or credit him with "the economy," as if he actually is in control of it. I don't have room here for a full economics lesson on the topic but I feel it's long overdue someone said this publicly: "The president doesn't control the economy. Neither does the congress. Both can affect it but not control it."

However, governments that become increasingly domineering of the populace also become increasingly distorting on their economies. That's why black markets are so much more prevalent in totalitarian regimes or under the presence of "bans" such as American prohibition and the "war on drugs."

In that vein, the last couple days I stumbled across a two-video series on YouTube which was a 1994 CNN television interview of Nobel-prize-winning American economist Milton Friedman.

Friedman had written the forward to a reprint of Austrian-born economist Friedrich Hayek's book "The Road to Serfdom." By that time Hayek was not alive and so it was the obvious choice to interview Friedman.

Interestingly, Friedman told the interviewer that "Serfdom" was mentioned to him by many people as one of the most important books on economics they ever read.

I concur. In fact, I tell people regularly that was the beginning of my economics education.

Hayek wrote in that book how government-controlled economics always distorts the economy and also how it also sets the path for totalitarian control. Prior to reading Hayek's excellent explanation I had only been immersed in the public discourse of the socialist-oriented media and the very focused studies of agricultural economics.

Nowadays it is shocking to me just how pervasive is socialist thinking, central-planned economics; the methods largely espoused by John Maynard Keynes. It also seems amazing to me to remember as I watched part one and part two of these interviews with Friedman that the Berlin Wall had recently fallen and most people at the time had really acknowledged just what a failure socialism/central planning really was.

Less than 20 years later we are again immersed in a national battle over whether to continue on the path of socialism we have been engineering since Roosevelt's New Deal or whether it's time to abandon it. You will not hear that in the "regular" news media, however.

But I believe we are at a turning point where our economy is crippled by socialist fiscal policy and the industry in which I work -- the beef industry -- is ultimately endangered by these things as much as the rest of the American economy.

I believe we can face the music and make the hard choices to clean up the mess or we can dissolve this nation much the way Rome dissolved well before the Goths and Visigoths came knocking down the walls.

These and many other things are in the discussion with Friedman. It is highly stimulating.

Then in another YouTube video, a Keynes vs. Hayek debate which was shot of a BBC radio broadcast last year, it became obvious to me the underlying theme of Keynesian disciples is always that we "should do something." They see it as a moral imperative, regardless of outcome.

It's just not right not to do something: It's their fall-back position. They never admit that doing something is a causative factor in the booms which are always followed by busts. And when called on the carpet for the failures of centrally planned economic backlash, they always resort to this morality theme.

In fact in the course of that debate, Professor Lord Skidelsky, a defender of the "European model" of Keynesian centrally planned economies says the European model is "very successful."

Indeed?

When government grows so large it consumes the majority of a nation's income for redistribution to the failed segments of society, is that successful?

When the Euro is being dragged down by socialist spending of a majority of countries and Germany is one of the rare countries which has shown fiscal austerity and remains financially strong, which of those models is successful?

When the long-term economic research Kansas-City-based economist Bill Helming oft quotes about debt as a percentage of GDP reaches unsustainable levels and economies stall and begin to falter, is that success?

It is beyond the time we need to recognize the government never creates wealth. Every dollar it possesses or spends is taken from the productive members of society.

I have never, never known of a government enterprise that didn't cost money.

I have never, never known of a government enterprise that made money, or earned it.

Government is here to protect its citizens and to maintain law and order, as Milton Friedman so succinctly states it in his interview I mentioned before.

It is up to us, the people of whom the government in this country is to be formed, to create commerce and jobs and to fill our needs and care for our families and help our neighbors. Imagining someone else will do it for us is the height of foolishness and the path to serfdom.