The American Spectator

Reader Mail

Let Palin Be Palin

10.8.08 @ 12:01AM

(Page 2 of 4)

THE DOLLAR DEBAUCHED
Re: Lawrence A. Hunter's Stop the Debauchery:

"Stop the Debauchery" by Lawrence A. Hunter is brilliant! I couldn't agree more. Washington Irving also wrote of such debauchery in 1819 in his "Crayon Papers":

[There occasionally arise] those calm, sunny seasons in the commercial world, which are known by the name of "times of unexampled prosperity" ... Every now and then the world is visited by one of these delusive seasons, when "the credit system" ... expands to full luxuriance, everybody trusts everybody; a bad debt is a thing unheard of; the broad way to certain and sudden wealth lies plain and open; and men are tempted to dash forward boldly, from the facility of borrowing.

Promissory notes, interchanged between scheming individuals, are liberally discounted at the banks, which become so many mints to coin words into cash; and as the supply of words is inexhaustible, it may readily be supposed what a vast amount of promissory capital is soon in circulation. Every one now talks in thousands; nothing is heard but gigantic operations in trade; great purchases and sales of real property, and immense sums made at every transfer. All, to be sure, as yet exists in promise; but the believer in promises calculates the aggregate as solid capital, and falls back in amazement at the amount of public wealth, the "unexampled state of public prosperity."

Now is the time for speculative and dreaming or designing men. They relate their dreams and projects to the ignorant and credulous, dazzle them with golden visions, and set them madding after shadows. The example of one stimulates another; speculation rises on speculation; bubble rises on bubble; every one helps with his breath to swell the windy superstructure, and admires and wonders at the magnitude of the inflation he has contributed to produce.

Speculation is the romance of trade, and casts contempt upon all its sober realities. It renders the stock-jobber a magician, and the exchange a region of enchantment. It elevates the merchant into a kind of knight-errant....The slow but sure gains of snug percentage become despicable in his eyes; no "operation" is thought worthy of attention that does not double or treble the investment. No business is worth following that does not promise an immediate fortune....

Could this delusion always last, the life of a merchant would indeed be a golden dream; but it is as short as it is brilliant. Let but a doubt enter, and the "season of unexampled prosperity" is at end. The coinage of words is suddenly curtailed; the promissory capital begins to vanish into smoke; a panic succeeds, and the whole superstructure, built upon credit and reared by speculation, crumbles to the ground, leaving scarce a wreck behind...

When a man of business, therefore, hears on every side rumors of fortunes suddenly acquired; when he finds banks liberal, and brokers busy; when he sees adventurers flush of paper capital, and full of scheme and enterprise; when he perceives a greater disposition to buy than to sell; when trade overflows its accustomed channels and deluges the country; when he hears of new regions of commercial adventure; of distant marts and distant mines, swallowing merchandise and disgorging gold; when he finds joint-stock companies of all kinds forming; railroads, canals, and locomotive engines, springing up on every side; when idlers suddenly become men of business, and dash into the game of commerce as they would into the hazards of the faro table; when he beholds the streets glittering with new equipages, palaces conjured up by the magic of speculation; tradesmen flushed with sudden success, and vying with each other in ostentatious expense; in a word, when he hears the whole community joining in the theme of "unexampled prosperity," let him look upon the whole as a "weather-breeder," and prepare for the impending storm.

It doesn't seem that long ago that the late Sen. Everett Dirksen (R-IL) made the observation that a billion here, a billion there, and pretty soon you're talking about real money. Well folks, forget the billion business, we're now about to cross the trillion threshold in a few short years.

As much as I admire and respect George W. Bush, his propensity to believe that unlimited access to the U. S. Treasury as a solution to a calamity -- be it 9/11, Katrina, or the current financial meltdown -- seems almost boundless. As Mr. Hunter aptly points out, such reliance on ever more dollars results in the debauching of our currency and is self defeating in the long run. Our foreign creditors will be the final arbiters on that question.

The present crisis is the culmination of running fast and loose with credit over many years -- aided and abetted by financial alchemy on Wall Street (derivatives anyone?). I thought Alan Greenspan was going to blow the whistle on excessive speculation with his observation of "Irrational Exuberance" when the dot com bubble was forming way back in 1996. But unfortunately he must have been persuaded that we were entering a new "financial paradigm" as he put it. From that point forward, he and his successor have also become aiders and abettors with easy money policies and interest rate manipulation. Greed and speculation have become ever more rampant as billions of ill-gotten gains have been siphoned off on one side of the ledger and millions of individuals, corporations and government entities are overburdened with debt on the other side of the ledger.

It seems to me that our government is desperately trying to see that there are as few losers as possible in this entire process. The winners, even some of the fraudsters, can keep their gains, while every effort is being made to bail out the losers. Market discipline has been severely undermined and moral hazard abounds. There's simply no substitute for sound money. I wonder if it's too late for someone like Paul Volcker to come along and straighten out the mess. It won't be pleasant, especially since it seems our society has a low threshold for suffering financial pain.
-- J. Brick
Beaver Dam, Arizona

LET THEM IN, YOU RACIST
Re: Mark Tooley's Do Immigration Concerns Equal Racism?:

Mark Tooley touched on a hot spot of this issue. Having "religious institutions" condone and support illegal behavior. As in most illogical arguments of this type, giving the most favorable label to the offending part of the issue is crucial.

While technically ambiguous, in this issue, the term immigration is used kindly. The majority of illegal aliens from Mexico and Central America have no intention of becoming an American or "immigrating" to this country. They are here for the jobs and money, a great portion of which they send "home."

Their home country supports and encourages this behavior and is rewarded handsomely, as in the case of Mexico it brings in the second highest income amount behind their oil production.

Letter to the Editor

topics:
Foreign Policy, Trade, John McCain, Barack Obama, Joe Biden, Sarah Palin, Business, Religion, Constitution, Law, Founding Fathers, NATO, Immigration, Alaska, Oil