Dorgan on Colbert

by | Jun 7, 2009 | Stress Blog | 6 comments

M writes: “I’m probably more suspicious of the free market than you are, but I share all of your anti-war views.

“Did you see Byron Dorgan on Colbert the other night? Worth a look.”

Me: Actually, it’s not that I think markets are perfect or anything (people are a mixed bag after all), it’s just that I think they are much harder on the biggest criminal corporations than government will ever be.

Re: Dorgan:

The Colbert Report Mon – Thurs 11:30pm / 10:30c
Byron Dorgan
Colbert Report Full Episodes Political Humor Keyboard Cat

(At this point my email response became this blog entry instead.)

Dorgan does in fact support the kind of modern banking that caused the Great Depression and the current one. He’s mistaken rather than deliberately wrong it seems to me, but notice how vague is his accusation that “deregulation” caused the crisis? As we all know, the U.S. government has had its central bank since 1914 and the mass of New Deal regulations have been only enhanced, with few exceptions, since the 1930s. Are we just supposed to believe a priori that if something bad happened it must be because the government wasn’t there controlling every aspect of it? What if we know that it was in fact controlling every aspect of something when it went bad? Do we believe Thomas Ricks and Gen. Petraeus when they claim that the problem with the Iraq war was a lack of regulation – a situation they claim to have remedied? Of course not, they are liars and murderers, and we already know the problem was that they started regulating Iraq in the first place, not that Feith and Bremer were laissez fair occupiers. (As well we know that Petraeus has at best delayed the effects of, rather than solved, Iraq’s remaining major unresolved political disputes.)

Fraud has been against the law for 500 years or more in the Anglo-American tradition. “Regulation” is not needed to prevent fraud, but to allow it. Banks can only loan out so much more than they have on deposit (fraud) without going bankrupt – unless they can join into a massive American banking cartel with the Federal Reserve at the head. That is, the Fed is the “lender of last resort” to the private banks. It can always create more money through inflation (with police power) to keep the pyramid scheme going longer, which of course makes it bigger and more painful for everyone when the whole thing falls.

At this point all the regulations (that have supposedly been strangled to death in the bathtub by the Republicans), which say we have to bail out those at the top of the pyramid scheme, kick in – to the trillions and counting.

In the 1920s the Fed’s regulation blew up its second bubble (the first had been to pay for U.S. involvement in WWI.) The effect was the popping of that bubble and the depression. (How Hoover and Roosevelt’s New Deal ultimately made matters worse, turning a depression into The Great Depression is another story.)

In the 1980s, Reagan the fascist didn’t “deregulate” at all, what he did was change the regulations so that banks could commit even more fraud than before – which of course caused the S&L crises, stock market crash of ’88 etc.. There must have been a billion laws on the books throughout this time – especially the ones that say we have to bailout Neil Bush, Frank Keating, etc. when economic reality tried to catch up with them.

The same thing happened in 1999 when Phil Gramm the fascist passed the law allowing all the different kinds of banks to merge together and commit more kinds of fraud. Check out this link where “Dr. No.,” Ron Paul, the only free market libertarian in the entire congress opposed Phil Gramm’s “deregulation” on the grounds that as long as the government has institutionalized a massive ponzi scheme, the last thing we want to do is change things to make matters even worse. (Rep. Paul has predicted this all since 1971. It’s why he ran for Congress in the first place. This list of Paul’s articles and speeches put together by Scott Sutton at shows that Ron Paul did indeed “tell us so.” And there is plenty there for someone new to his Austrian school views to gain a good understanding understanding of why he knew what so few else did.)

Notice that Dorgan calls Colbert “Alan Greenspan’s nephew” when he pretends to oppose regulation – but Alan Greenspan was the Chair of the Open Market Committee! – The “Decider” of the very currency used in all our transactions. All of his decisions were carried out with police power. When he decreed that money should be artificially cheap to borrow, he made it so with the power of the state, not the free market.

To belabor the point a little bit more: Alan Greenspan’s problem was not (as the media keeps repeating) that he knew Ayn Rand in the 1960s and is therefore some kind of libertarian who let Wall Street go crazy due to his belief in the free market.

First, Ayn Rand was not a libertarian and knew nothing about monetary policy, so whatever Greenspan’s problem is has nothing to do with Randianism or whatever they call it (silly and besides the point, but still). And secondly, he came to the Federal Reserve from JP Morgan and Mobil Oil. He’s been a corporatist bureaucrat his whole career. Third, he created the mess we’re in by lowering the reserve and capital ratio limits on fraud and helped to create and then ignore all the various new types of derivatives and double-macho-grande-blind-unfunded-MBS-CDS frauds which helped the richest siphon off as much of the real wealth as they could from us before the bubble popped.

So anyway, my point is that the Wall Street criminals are the biggest socialists in our society. Each one is like every single mother ever to get welfare, WIC, S-CHIP, foodstamps, Medicaid and Section 8 housing combined. First they counterfeit trillions, creating a set of massive global bubbles, then when the bubbles pop they make us all bail them out with massive inflation. Next they’ll bring in a new guy to raise interest rates through the roof to force the very recession they’re inflating in order to prevent now, in order to lick all the inflation they deliberately caused – if they haven’t completely destroyed the dollar beyond repair by then. Every bit of this is happening where the central planning regulations are, not where they aren’t. This is to be expected since bankers always have a bigger voice in policy matters than single mothers or anyone else, and want to control the market themselves rather than take the risk that is supposed to be other side of the scale from reward.

In a free market, banks who committed the fraud of “fractional” banking could only go so far and no further. If their paper is bogus the other banks wouldn’t accept it. Fraud would still exist, but it would be its own punishment, with the consequences internalized onto those responsible.

And perhaps most importantly, with sound money the government would be unable to fund its massive wars. The government’s ability to endlessly print up new bonds to sell (and new dollars to buy them back with) allows them to play this game where they make war seem free at first to get everyone on board with disasters like our current one the result.

As Lew Rockwell put it: No sound money, no peace.

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