Monday, September 22, 2008

The Real Winner or Loser?

By Alan Caruba

It is a truism that all national elections are crucial to the future of the nation. We choose a President and a Vice President, along with a whole bunch of other candidates whom we believe will do the best job of guiding the affairs of the nation.

It is not even a question of the world being a dangerous place. The world has always been dangerous. War has been, as often as not, the determinant factor in the affairs of mankind. “Si vis pacem, para bellum”; if you want peace, plan for war is a piece of ancient wisdom that still serves us well today.

Nor is it a question of economic crisis. The United States has been through many cycles of financial crisis. It is endemic to the capitalistic system. Indeed, failure under capitalism is neither unusual, nor necessarily permanent. Companies, old and new, fail all the time because, among other things, new technology drives out old technology. Just take a look at the current plight of the newspaper industry as but one example.

What marks the current financial crisis as unusual is the size and scope of it. The price of having become an economic superpower has been the size of our government and the excessive intrusiveness into the marketplace that has come with it. Size, in this case, translates into billions for the bailout required.

The financial markets, however, are a barometer of hopes and fears. If there is anything rational to its constant fluctuations, I have yet to have seen it. The market, as a result, is subject to “bubbles” like the Dot.Com mania and the “corrections” that follow.

These are, of course, euphemisms for throwing money at untested, unproven or very dubious schemes such as the “bundling” of all the bad debt run up by sub-prime mortgages. They are mortgage loans which would not have existed if the government had not insisted on, required it, and then put its full faith and credit behind them.

Just how rational is Wall Street when prices rise and fall like yo-yo’s depending on the price of oil or some other momentary factor? The financial market is all about capitalism and capitalism is all about risk. It’s hard to be rational when you have your life’s savings or retirement on the line. Politicians understand this.

Whoever is sworn in as President next January is going to inherit, literally, a world of problems with which our essentially 1940s, bloated government is ill-prepared to deal.

The only reform worth considering is a massive down-sizing of the federal government. Whole cabinet departments need to be eliminated. Thousands of programs need to be ended. The government has to stop telling Detroit how to build cars. The government has to stop subsidizing ethanol and distorting the agricultural marketplace at home and worldwide.

This is why the U.S. Constitution existed originally to limit the size and powers of the federal government. In fact, it could not have been ratified without the addition of the Bill of Rights, the Tenth Amendment of which says, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

The United States is a republic composed of fifty separate republics. They united "to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity."

We are that posterity!

Find where the Constitution authorizes a Department of Education or Energy? You won’t and you can’t. That power does not exist, no matter how many circumlocutions constitutional lawyers offer to justify it.

Time to clean house...but the next President will not be able to do so.

The natural tendency of Congress and the Executive is to acquire more and more power through taxation and regulation. Barring that, it is done by fiat; by declaring the power exists even if the Constitution states otherwise.

It is much the same with the money that will be conjured up to bail out the banks and, in AIG’s case, an international insurance company so big that it could not be allowed to fail. Fiat money, borrowed money, money that risks the devaluation of the U.S. dollar if Americans and the rest of the world lose confidence in it.

No President can allow that to happen on their watch. Not Bush, not McCain, and not Obama...unless he is the Manchurian candidate selected to destroy the nation.

So the question arises, who will be the real winner or loser of the next election? The man who becomes President or the man who dodged that bullet?

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