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Jim Cook

 

RUNAWAY SOCIAL SYMPATHY

Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

 
Best of Jim Cook
September 25, 2007
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STICKER SHOCK AND SOCIALISM

My wife and I bought a new oven a few years ago. It was a lemon. Recently, we had a repairman come for the third time to fix it. The warranty had expired. He left us a bill for $640.00. Ouch! I took my dog to the vet for shots and heart worm pills. They charged me $240.00. I remember the day when a repairman never charged more than $25.00 and a trip to the vet was a few dollars. Nowadays shopping at the grocery store leaves you shaking your head over the price increases.

Given the falling dollar, big deficits, artificially low interest rates and new money created to bail out the credit and mortgage mess, this kind of price inflation can only get worse. In fact, it’s an absolute requirement for money and credit to keep expanding or an economic contraction will unfold. That’s something the government and monetary authorities fear above all else. The excessive debt and credit in our system would lead to a collapse. It’s inflate or face some very unpleasant music. Eventually, we’ll have to pay the price, but, for now, it’s more inflating.

Government statistics indicate an inflation rate of 2% to 3%. However, the rate of inflation can’t be judged accurately by a few items the government arbitrarily chooses to measure. When Wall Street analysts on TV claim that inflation is low and under control, it makes you wonder if they ever go shopping. The Federal Reserve makes a big noise about controlling inflation. The late economist, Murray Rothbard, had this to say about that ruse. "The drum-fire of propaganda that the Fed is manning the ramparts against the menace of inflation brought about by others is nothing less than a deceptive shell game. The culprit solely responsible for inflation, the Federal Reserve, is continually engaged in raising a hue-and-cry about ‘inflation,’ for which virtually everyone else in society seems to be responsible. What we are seeing is the old ploy by the robber who starts shouting ‘Stop, thief!’ and runs down the street pointing ahead at others."

You must prepare yourself for $10 a gallon gas, $10 for a loaf of bread, and $10 for a dozen eggs. Retirees are going to get crushed. If you have income, don’t let it go. Put a portion of your money into hard assets. Operate judiciously, with low risk. Regard all paper assets with suspicion. It’s possible that our money is losing 10% of its purchasing power every year. Remember that inflation is a hidden tax engineered by the government. The left wing economist, John Maynard Keynes, wrote, "By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens."

There’s more bad news. There is a pernicious philosophy loose in our land. It loathes free enterprise, capitalism, free trade and free markets. It aims to punish success by crushing business and entrepreneurs with high taxes. Its goal is to spread the liberal agenda of big government, welfarism, multiculturalism and socialism. It has no qualms about taking your money, reducing your freedom and increasing its power and control. Through the government’s welfare subsidies it turns our people into slaves of the state.

Inflation is the handmaiden of this wretched philosophy. According to the late and great Henry Hazlitt, "Inflation makes the extension of socialism possible by providing the financial chaos in which it flourishes. The fact is that socialism and inflation are cause and effect, they feed on each other!"

Fifty years ago the freedom philosopher, Leonard Read wrote, "the extent to which the government in this country has assumed the responsibility for the security, welfare and prosperity of our people is a measure of the extent to which socialism has developed here in this land of ours." Every new government subsidy, tax, regulation, bailout and benefit nudges us further down the road to socialism and national bankruptcy.

History shows us that socialism doesn’t work. Brought to its inevitable conclusion, it leads to hell on earth. It’s made to order for tyrants. It spreads poverty instead of plenty. It undermines the market system and private property. It ignores its failures with demands for more of the same. It refuses to see the blessings of capitalism and free markets. It is rooted in envy, force, expropriation and control. It is the blueprint for national ruin.

This is the source of the inflation you and your money are up against. You may think my nightmare vision is premature or exaggerated. The bread you once bought for a quarter is now $3.40 a loaf. This is the statistic to remember if you question whether socialism and inflation are winning. The so-called middle road between capitalism and socialism is a slippery slope that only leads to bigger government. This trend threatens your prosperity. Financial survival depends on your awareness of what’s happening. Social survival depends on how many people you convince.