Monday, October 25, 2010

I've Been Reading Lately

Daniel Hannan--elected to the EU at age 27
Want advice from a member of the European parliament?  Before you say "no", keep in mind that Europe is about 10 years ahead of us in their own "social agenda".  I recently finished reading "The New Road to Serfdom" by Daniel Hannan--a twice elected British member of the European Parliament.  Interesting reading!  His caution to America: "I really hope you've thought this through, my friends. Because, believe me, there is no going back."  If you've watched the news lately you've seen the civil unrest in European countries and in Greece.  This is our own future if we don't make changes now.  There are several lessons to be learned by observing foreign countries--regarding America's situation.  Hannan lists the following six observations:
1.  Federal agencies and programs are much easier to establish than to discontinue.  (Example: Fannie Mae)
2.  Although government spending can have a short-term stimulating effect, state agencies are unwieldy organizations.  Often the worst downturn will be over before their full fiscal impact is felt.
3.  Debt incurred by supposed contingency measures can take decades to pay off, as notionally emergency policies become a permanent drain on the treasury.
4.  There is a tendency in government to expand at times of crisis, not in order to meet the crisis, but in order to allow politicians to demonstrate they are "doing everything in their power." (You've probably heard the joke that the country would be better off if Congress adjourned for 11 months out of the year!)
5.  Such expansion  is most damaging and most permanent when it is carried out at a time of one-party dominance.
6.  Whatever the economical consequence of state expansion, there are always deleterious democratic consequences, as the advantages of decentralization are lost.  (Citizens find that decisions that impact them the most are made not by locally elected officials, but by the appointed directors of large bureaucracies.)


  1. There is a good deal of truth in what you say, and there is, unfortunately a smattering of nonsense. A case in point is you Fannie Mae comment. Fannie Mae needs an overhaul, I am with you there. But discontinue Fannie Mae? Do you really understand what Fannie Mae does? I dont think you do. Without a secondary real estate market (an entity, like Fannie Mae that buys loans from banks)our home ownership rate would be much lower, try around 40 to 50%. Thats what it was prior, and that is what the rates of countries that dont have evolved secondary markets have. Not only that, interest rates would skyrocket, because money would be very limited, it would be tied up in mortgages. I admire what you are doing, but you are painting at times with a brush that is too broad, and trusting the words of polititions (who have been educated by interest groups) and the media, (which has its own agenda).



  3. Not so Lucas! Do these people really own their own homes??? No, they do not. They cannot afford them--that's where YOU AND I come in--we bail them out. Home ownership--or government servitude? Which is it? It was politicians in Washington who encouraged these high risk loans in the first place--all in the name of equality. They offered incentives and rewards (nearly in the form of MANDATES) to bankers to make these ridiculous loans--thus opening the door to all types of corruption and kickbacks between bankers and politicians. Yes, I realize that there's a good chance that most mortages will be sold to a second, third or even fourth financial institution. You have to MOVE money to MAKE money. However; I totally disagree with you that the federal government is the only game in town. If they got out of the banking industry and let banks work at a local level--we'd have a much more stable economy. My own credit union for example: We took out our mortgage with our local credit union--they DO NOT SELL MORTGAGES. Neither do they participate in "risky lending practices." They are now the second most secure credit union in the country for credit unions their size. A smattering of nonsense? Me thinks not! If you don't like the blog--don't read it. Now do your homework!