What we spend 1/3rd of our life doing
Ok random thought time. What do we spend 1/3rd our life doing? We engage in an economy. We work, we buy, we sell. When I sit back and think about it of the time we spend living engaging in some for of the national economy is quite large. I also think its the one thats most fragmented. I don’t think people think about the connection between work, buying, and freedom.
In the last 50 years or so the government has had more and more control over our lives by getting involved with the economy. Organizations like Fannie Mae and the FDA in their own way intended to help us have caused problems all their own. I am now going to regurgitate thoughts onto paper so hang on.
How does Fannie Mae help us? How does Fannie Mae hurt us? While I think Fannie helps some with keeping the cost of owning a home lower (see my older post, about how I don’t know if this is a good thing or not). The problem it can cause is worse than the benefit. Many of these organizations are put in place as though they can never fail. Problem is anything built by man can fail and does given the right means. Problem is when a government entity fails it can threaten to really hurt a market. Notice I don’t say take down. You can every kill a market, as long as there is two free people each with something the other wants the market will work. Its more a question how well it would work.
Take large banks. Right now we see many of them having trouble because they got over their head with sub prime loans, just like Fannie Mae did in the name of ‘promoting home ownership’. Not all the banks did though. There are many banks, many very large when one of them fails it hurts. It is not possible for all banks to fail, there is just to many. So even in the worst kind of misbehavior the damage is limited. Now lets look at similar government organizations. While Fannie Mae and Freddie Mac both service the same purpose they are only two institutions and its much simpler for 2 to screw up and fail than many. Its just the statistics of it. We now find our self’s where the government has to bail them out at a huge cost. The bottom and consequences because Fannie Mae exists is worse than if they were never created in the first place. Without them blood would have been split, oh the initial shock might have been greater but how far the market could fall should government not do anything would be much less.
Because government got involved in the private property business, that is encouraging the owner ship of one type of propery (real estate). The problem can and are worse. Then the amazing thing happens that only happens in government which I will go on to explain next.
All institutions have intentions and results. The hard part is getting from the first (intention) to the second (results) and having them be equal. In the market if you get to far from results equaling intention you go under. People loose there jobs (that’s great) and the organizations that do make it from intention to results grow. Those who worked at the now failed organization are freed to work in more effeicnt and successful organizations. That is the market is self correcting though it is not kind. In the end we are all better off.
Government instutions also have intentions and results. The change here is that when the results don’t land near intentions instead of failing more often money and resources and authority (new power invoked by congress) in added making the failed beast even bigger. This is what amazes me. Fannie Mae screwed up, is put its fingers into the wrong pot and got bit, in a working market they would be eaten up by those more prudent and better heads would lead from then on. Instead the same people will be taking money from tax payers (who are now bearing the risk of a publicly traded company no the share holders). To keep them up and even lax the rules on what Fannie is allowed to buy! Does this make any sense?
Fannie is just one example, there are many more, find one time where a government organization has failed and the leading body, be it congress or local board, say “shut it down, it failed”. No we keep trying with the same broken POS.! Tear it down, maybe try something radically new but judge them on their results and admit failure. I think history shows more often failure by such organizations than success.
In the end, again I feel my brain pushing me more and more towards Ben Franklyn style thinking. It is true I think, that the Libertarians are the closest thing we have to our founding fathers. If I was ever asked if I would rather be a man like the founding fathers or the current crop of leaders, my answer would be quick and simple.
End Rant.
