by Ron Paul
Unemployment continues to plague our economy. In spite of constant claims that we have just turned the corner into recovery, the jobs report remains grim with no real signs of improvement. While Keynesian economists and big government apologists scratch their heads about persistent unemployment in spite of unprecedented government so-called “investment” in the economy, free-market economists understand the problem perfectly well. In short, they understand that we are looking to the Federal Reserve to solve an unemployment crisis that the Fed itself largely created.
For example, the Fed is supposed to maintain full employment as half of its dual mandate. But the Fed simply has the wrong tools to do this. In fact, its credit expansion and manipulation of interest rates cause harm when they are applied to “help the economy.” As we saw with the housing boom and bust, Fed-created inflation cannot be sustained without harmful consequences. The Fed’s artificial boom led to the unemployment we’re suffering today.
The Fed is not a small business or a manufacturer that creates value or increases productivity to sustain real job growth. It literally destroys value by printing more money and distributing it through sweetheart deals to well-connected banks and corporations, including foreign banks. The only success the Fed has had in maintaining full employment has been on Wall Street, where it props up crony banks and investment houses to protect them from going bankrupt as they should. Instead they survive to malinvest another day while their executives enjoy jackpot bonuses.
The Fed also pumped up employment in the housing industry with artificially low interest rates that created an unsustainable demand for housing. Millions jumped into the sector when the money was loose and the bubble inflated. Besides the many who bought houses they could not afford and now face foreclosure, there were also those who became employed in housing-related fields. These people invested time and money in training and spent years establishing careers in real estate, mortgage lending, construction and contracting. Careers that all vanished into thin air with the burst of the bubble. Now they face considerable disruption in their lives as they struggle with unemployment, underemployment, and decisions about retraining for different careers. This amounts to a tremendous amount of unnecessary waste that would not have occurred had the housing industry be allowed to develop naturally according to market demands.
Jobs are properly created by entrepreneurs who are willing to work hard and take calculated risks. Jobs are also created through real increases in productivity, resulting from real investment profits or conservative borrowing at market interest rates. But the Fed has made those risks impossible to calculate and made borrowing money artificially cheap. As a result, economic growth has been chilled while unemployment skyrockets.
Until those in power understand the harm they do with central economic planning, we will continue to slide backwards and lose jobs. The Fed needs to stay out of the job-creating business altogether, and the federal government needs to focus on its constitutional duties. Just when we need government to back off, we hear about more government intervention in the economy in the form of “more spending”, only they call it “investment”. It is more properly called “malinvestment”, and the resources that are funnelled into industries by government policies will only hurt employment more in the long run.
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but with free market competition, unless the Insurance companies were illegally price fixing, one company would offer a better deal, better pricing, better service and consumers could use them!
Law doesn’t make my employees wash their hands, I do and would do so whether or not I was health inspected.
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Price ceilings are caps on what they can charge!
And here, again I sort of agree. With healthcare, it needs to be all or nothing. Either completely socialize it or complete free market (i prefer free market, but would accept Socialized over this BS).. but instead we are left with more of the same Crony-Capitalism that benefits no one except politicians and insurance companies.
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Who regulates the value of money? The Federal reserve… and independent cartel of bankers with no regulation from congress. Ever notice how the value of money ALWAYS goes down?
And when was the last time we declared War? WWII. It’s such BS
And what if my pursuit of happiness came from drug use and I harmed no one else through it? And who exactly is the enemy in the “war on drugs”? The millions of Non-violent offenders locked behind bars?
Please.
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No, I expect my local school board to make sure students are being educated properly! And if they do a poor job, people leave the area for one with “better schools”. If they do well, more people move to that city and funding rises. And if it becomes known that a certain area produces quality students, companies will move there and create jobs because they know there is a quality workforce available! Then other districts can take notice of what works and adopt it!
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No, I expect my local school board to make sure students are being educated properly! And if they do a poor job, people leave the area for one with “better schools”. If they do well, more people move to that city and funding rises. And if it becomes known that a certain area produces quality students, companies will move there and create jobs because they know there is a quality workforce available! Then other districts can take notice of what works and adopt it!
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Exactly, that’s the free market! Just look at the difference between Ford and GM/Chrysler.
Ford new that after the late 90′s, early 00′s, car companies could no longer function the same way. So they readjusted their business strategy leading to a couple years of losses (which they could absorb because they had stockpiled enough operating capital). Chrysler/GM did not adjust. So who became profitable and who went into bankruptcy? Then the Gov had to (illegally!) step in and bailout
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Yes, there were corrupt Realtors and shady moves by loan officers, but this was a symptom, not the cause! This is the Manifestation of the “irrational exuberance” caused from loose credit (FED) & a policy of the Gov to encourage & subsidize home ownership,all under the guise that property would always rise in value.
This artificial demand created by the Fed/Gov led to inflated home prices,so when the Market adjusted to correct home prices, people owed more than their homes were worth
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Why did the Soviet Union Collapse? They had zero unemployment. Everyone had a job!
It collapsed because of TOO MUCH central planning. Too many price controls, Too much rationing because the Government was in control to “Protect” its people.
And guess what will happen if gas becomes too expensive for people? The market will demand that other options be provided, and whoever does so 1st/best will be rewarded by the market!
I encourage NO ONE to own their home if they can’t afford it!
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It is most definitely relative to production! You can point to Gov creating Gov jobs, but you can’t point to how many jobs were NOT created because of the taxes levied to pay those Gov employees! The Gov does NOT produce anything, they only tax and take away from the productive.
GM would make cheaper cars! And would probably have introduced affordable electric cars by now!
Only savings and capital investment can lead to production/job creation/economic growth… NOT Gov spending
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& no, profit driven is what makes us an amazing country and has enabled us to improve the lives of BILLIONS. Google and FaceBook have changed the way the world works (arguably for the better) because they are profit driven. Cell Phones and Computers have ALWAYS gotten better, and cheaper because of the drive for Profit. Food supplies around the world have continued to rise steadily because of the drive for profit!
Don’t confuse the illegal acts of few as “drive for profit”=Bad
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I don’t follow what Madoff has to do with anything other than to point out the ineptitude of Gov regulation (since they were notified of his activities several times and did nothing). And size is most definitely relevant. Do you ever deal with bureaucracy? Ever notice that it takes forever to get most things done! When an organization becomes so large, it is impossible to operate efficiently. Remember 9/11! The Report even blamed the size of the intelligence community!
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You misunderstand the power a consumer possesses in a free market. They are the ultimate regulator. Because corporations NEED consumers to buy their product, and since as long as there’s not a Monopoly (pretty much only found in heavily government regulated industries, or where Government operates like a private corporation(ie Post office, AmTrak))they then they must compete with other Corporations for customers. Leading to better/safer/cheaper services/products.
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“Is that necessary?”
You never know whether something is necessary until you need it. I agree that we don’t need a military this large, but we cannot cut military spending (to a degree) during a conflict. When the conflict is over (hopefully soon) then we should cut military spending a little.
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“Is that necessary?”
You never know whether something is necessary until you need it. I agree that we don’t need a military this large, but we cannot cut military spending (to a degree) during a conflict. When the conflict is over (hopefully soon) then we should cut military spending a little.
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A hotel being required by law to be sanitary has nothing to do with them wanting to keep other hotels from opening as competition. A restaurant being required to maintain a certain level of sanitation has nothing to do with whether someone else can open a restaurant. Anyone can open a restaurant as long as they can meet the standards. It doesn’t hinder competition, unless the competition don’t want to meet the standard. And, who would want to eat at a place that refuses to be clean?
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A hotel being required by law to be sanitary has nothing to do with them wanting to keep other hotels from opening as competition. A restaurant being required to maintain a certain level of sanitation has nothing to do with whether someone else can open a restaurant. Anyone can open a restaurant as long as they can meet the standards. It doesn’t hinder competition, unless the competition don’t want to meet the standard. And, who would want to eat at a place that refuses to be clean?
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The anti-texting laws are actually state mandated laws-not federal. That’s why it’s not in every state. So, the increase in risk of death is a result of state laws. Either way, how people respond to a law is not determined by who made the law. In other words, no one is going to say, “I won’t text and drive because the governor said not to, but, if the president tells me not to, then, gosh darn it, I will do it all the time.” It won’t matter to any kid who want to text while driving.
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The anti-texting laws are actually state mandated laws-not federal. That’s why it’s not in every state. So, the increase in risk of death is a result of state laws. Either way, how people respond to a law is not determined by who made the law. In other words, no one is going to say, “I won’t text and drive because the governor said not to, but, if the president tells me not to, then, gosh darn it, I will do it all the time.” It won’t matter to any kid who want to text while driving.
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This guy is a politician and he knows what he talks about because he helped create it. The fact that he ‘knows’ what is happening…we all know what is happening, the fact that he is a politician is not making it better, actually, it shows how politician’s keep stuff from us so they can use it to lobby before elections. Is just a Game betwin them for us to have the impression that someone is protecting OUR interest. THE FACT is that NO ONE protects our interest as humanity.
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Yes, Inflation is stealing from the people… Stop them Ron Paul…
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Your overall point only makes sense when you look at it from a bird’s eye view. But, when you get down to street level, it doesn’t fit with common sense.
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What about money funnelled into industries by mobsters or drug lords? How about those like the Rockefella’s? How about foreign entities? Is it okay for them to funnel money into industry? Why does it only hurt the US when the money comes from gov’t?
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As they call it? Investing IS spending! How do you invest in something without spending any money at all? No one can invest in the stock market unless they spend money on stocks. Nothing’s free!
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It’s not good to invest in widgets if the marketplace doesn’t have a need for widgets……especially when it’s not your money.
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You mention the gov’t's constitutional duites. Well, what exactly are it’s contitutional duties?
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If the federal gov’t stay out of the job creating business, then you are suggesting no regulation. Human nature teaches us that the only way to keep greed from running ramped is to set guidelines, rules, and (dare I say it) regulations to keep everything fair for the consumer.
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How can you compare pumping dollars into something with regulating something. Your statement makes no sense.
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Unemployment skyrocketed because businesses looked at layoffs as the most cost-cutting tool available in order to maximize or not fall below project profits.
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Develop naturally through market demands????? Uh, the number of sales in real estate show how the demand was. Are you only addressing this from a business aspect?
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These bonuses which were funded by stimulus money are the same ones that your party refused to demand repayment of. So, which is worse: Given the money to the banks, or letting them keep it?
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Well, Ron, you cannot try to simplify the situation by blaming those who wanted to buy houses for the financial crisis. For, the crisis is more than the real estate market. Also, those who bought houses have no say so in what accounts are sold to other banks nor what rates their APR’s will increase to every year. It is the “market” that decides that. If you want to blame someone, blame those that control the market.
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“The only success the FED has had in maintaining full employment has been on Wall Street, where it prompts up crony banks and investment houses, to protect them from going bankrupt as they should..” couldn’t said it better.
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Canadians hope that our southern neighbours will elect Dr Paul so that you can enjoy liberty and prosperity.
Dr Paul is quite popular here; he may be the only politician in North American who is honest, pro-liberty, and anti-war.
God bless Dr Paul and the American people.
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That’s impressive…..6,369 views and 0 dislikes.
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Has Ron Paul seen Zeitgeist Moving Forward? I’d love to hear his thoughts on it.
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Excellent video. Remember the financial bailout that nearly every intelligent American was against? Well, when it passed, what you just witnessed is called a Financial Coup D’etat. . Our Democracy has been slowly eroding towards a full-blown Plutocracy. Sometimes I wonder if we haven’t already arrived.
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Go Ron!
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