Failure of the free market system?

I'm reading a lot about how the free markets have failed and how we need to change this or that. In order to arrive at that conclusion you'd have to be either intellectually dishonest, ignorant, or possibly both. It's convenient to blame the current economic struggle on the failure of the "free market", however the market we have is neither free nor would it be a failure for a truly free market to experience periods of economic contraction. First of all a free market implies that there is an absence of external manipulation; with Congressional bailouts and the Federal Reserve tinkering with interest rates our market is anything but free. In fact it is the very actions of Congress and the Federal Reserve that led to the economic crisis we are now suffering. Second, in a free market excesses and malinvestment are corrected through a cleansing that comes with a contraction in the economic cycle, any attempt to intervene only postpones and increases the severity of the correction. Third, it is asinine to assume a system as complex as the US economy could be manipulated without unforseen consequences which may be more detrimental than those initially feared.

It's interesting (at least to me) that our grandparents are regarded as the "Greatest Generation"; largely because of their sacrifice during WW2 as well as the subsequent prosperity our nation enjoyed following their victorious return. They also experienced first hand the calamitous consequences of the Great Depression and responsibly saved and skimped for the remainder of their lives in preparation for the next round should it ever occur. Simply put: they experienced adversity, learned from it, and as a result were better prepared than previous generations.

It's understandable to avoid adversity and protect loved ones from the same, one possible concern being that experience is an excellent educator and as a nation we have been skipping classes for two generations. It is precisely this tendency for present day Americans to avoid hardship, demand assistance, and willfully acquiesce liberty that resulted in an economy built on consumer spending and consumption rather than saving and production. Throw in a fiat currency and a government that is willing and able to pass laws to "protect" it's citizens and you have the recipe for an economic time bomb.

Perhaps it's a bit conspiratorial, but I think the chaps in Washington don't want self sufficient citizens, the kind who can't be bribed with handouts in exchange for votes; its better for them to have a bunch of ignorant simpletons who need entitlements to survive. How else would you explain an unlimited annual tax deduction on mortgage interest and an annual cap of $5000 on retirement savings?

Would you rather be and ignorant simpleton or a thinking citizen?

-Joe

End the Fed...and a related discussion.

Brian sent out an email with a link to this video, I wanted to post it here so that everyone could join in on the discussion that started brewing. I've integrated the disqus commenting system so hopefully it will add the the quality of our discussions.


-Joe

the unseen cost of consumerism

The cost of consumerism is more than just the money wasted on unnecessary gadgets, trinkets, and toys. Perhaps the most egregious cost to bear is the misplaced capital, research, engineering, and production that would otherwise be dedicated to more meaningful products. By consuming "junk" we are signaling to manufacturers (both domestically and abroad) to allocate their production capacity as well as research and development to items of questionable value. For every widget that is conceived, produced, and purchased for consumption, valuable resources were expended that otherwise could have been directed to more meaningful endeavors. Initially this shift in resources may seem benign until one considers the absolute cost of such waste. Literally hundreds of billions of dollars are spent annually on products that provide little to no lasting value, are destined for a landfill, and are frequently toxic.
In addition to the misapplication of production capacity there are additional costs as well. Money aside, the hours and mind power spent accomplishing something of little enduring value has to be acknowledged and accounted for. This energy if redirected and focused on some worthy (I'll let you decide what that might be) cause would pay enormous dividends to current and future generations. What if a significant number of television viewers decided to volunteer their time towards a social cause for just an hour a week? How many man hours would that tally to? At some point in history the quest improve life reached an inflection point shifting from a positive reduction in labor and time to what we have today where even the poorest (at least in the United States) will fritter away valuable time on useless gadgets, games, and television programming. At no other point in recorded history have we had the ability to waste the way we do presently. Perhaps some of it stems from ignorance or even apathy; either way the fact remains that millions of people starve to death each year while the developed world throws away cheap toys from fast food kids meals. No mentally healthy human being would allow another human to die in exchange for a (insert useless item here) yet that is precisely what we are doing. Just today I received a request from World Vision asking for as little as $27 to provide medicine for children who will likely die without it. What have you spent $27 or more on in the last week that had the potential to so profoundly impact a life?

We have the capacity to eliminate much of the suffering throughout the world by simply reallocating how we direct our resources. What's wrong with us?

-Joe