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Above is a worthy discussion about the anti-consumer / pro big and connected business fraud that is anti-monopoly legislation with Ron Paul. While the video is some 25 years old, the content is perfectly valid today (if not also a testament to the consistency of Ron Paul since then).
A great myth perpetuated by those in government and many in academia is that absent regulation, the free market will do its utmost to increase profits via anti-consumer actions, with one of the biggest crimes being the formation of monopolies. As such, we endure day after day, year after year, ever more corrective reactions from Congress in the form of regulations that we are told will curtail the natural exploitative faults of the free market, thus improving the economy as a result.
Yet, when you dig just a little beneath the surface, you’ll find that’s an assumption built on a faulty premise. What you’ll see is that these many legislated regulatory actions are actually fixing the economic / market reaction to a previous legislated intrusion, and in many cases serve not to be pro consumer, but rather pro-big business and very much anti free market competition. These laws not only often fix prices artificially high (either outright or via anti-trade legislation), they flat out create massive hurdles — bureaucratic or otherwise — that serve as barriers to entry for legitimate free market competition.
A great example today is all the cries for further regulating the credit, banking, housing, and mortgage systems to “prevent further abuse and recklessness.” In reality, the bubble that is bursting was created by a money monopoly granted to the Federal Reserve and its many member banks, who are quite literally entitled to legally counterfeit. They call it fractional reserve banking, but in no uncertain terms the entire banking system engages in the constant and ongoing printing of money and credit out of thin air, which they in turn use to create loans and mega finance deals.
It was the artificial price fixing of credit and money well below the natural market rate that enabled and fueled the housing, mortgage, and credit bubbles into the stratosphere. Had the rate of money instead been free market controlled by a more honest currency, as demand for hot money loans increased, rates would have risen, nipping each of those bubbles in the bud. Instead, the printing presses of the banking system kicked into high gear and the bubble was off to the races.
Now that said bubble is in its corrective phase (yes, painful but natural and necessary to correct the massive clustering of errors it permitted), the Banking system wants to print more money and credit to bail-out the very problems their created thanks to their monopoly on money and credit. Meanwhile, our trusty servants in Congress are getting in the act by engineering stimulus packages while promoting even more legislation that will “fix the banking system.” Others want to regulate ratings agencies who failed to properly measure risk, failing to understand that prior regulation prevented competition from entering the market and restructured / bastardized the system into its current highly corrupted form. Yet the illiterate among us shout loudly from the rooftops, the Capital’s steps, or their media perches blaming “the free market” for creating this folly. Bunk! Absolute Bunk!
Alas, save for one or two in Congress — Ron Paul being the only politician getting any press, and now barely any at all — NOBODY bothers to address the real manufacturers and profiteers of the crisis: The massive banking cartel led by the privately owned Federal Reserve and its many member banks. Their highly lucrative monopoly is preserved, and so too are their highly important contributions and lobbying efforts that keep most of Congress firmly in power.
In other cases “pro competition” legislation creates a ramshackle set of rules that hamstring the particular sector of the economy so badly that the consequent market place is the consumer equivalent of some hodge-podge Frankenstein creature. The health care system in the U.S. is a prime example, where the heavily regulated byproduct — which is nothing but what’s left of the free market attempting to create something usable given the draconian rules governing it — ends up being a real disaster for consumers. Prices keep getting more expensive rather than cheaper, and the consumer continues to feel ever more compromised — which is the exact opposite of the norm in a truly free market.
Meanwhile, those major players that are most politically connected and capable of lobbying are the ones who dominate the industry, while the environment is so hostile to new entries that few bother to attempt to compete. The result? A defacto, legislatively-created monopoly for major hospital conglomerates, pharmaceutical companies, and regional health insurers. All levels of government get into the act, each exacting a toll to gain access, and each limiting the free market from doing what it otherwise might.
And, yet, these same politicians who soak up dolling out favors at the trough have the gal to blame the free market for being inadequate at providing good consumer products when what we’re all stuck with is a Frankenstein of their own making!
Meanwhile, the uninformed and socially motivated consumers and voters see the system only on the surface, and they demand change. The politicians are quick to blame free enterprise, and they propose more solutions to solve the problems created by decades of prior meddling. Meanwhile, steering the new legislation are the same ones benefiting from the old. They’ll have the economies of scale to deal with the new rules, while smaller players will invariably be knocked from the playing field. It’s always the same story.
This is a mess. Remember, if government forcing us into one of their solutions is the answer, you’re asking the wrong question! A true free market (one where businesses, industry trade groups, and other special interests are prohibited from hijacking freedom and economic resources in their favor) is naturally competing with itself to deliver ever more affordable quality to consumers. The natural tendency always is a better product for a lower price as entrepreneurs continually attempt to redefine efficiencies and opportunity in the search for profits.
If you want consumer driven solutions that please the most people, don’t force them into shoe-box solutions created by compromised politicians who are themselves experts only at politics and government. Let the market compete freely and openly, and then — and only then — will order start to be restored to an economy that increasingly is being exposed as systematically rotten to the core, having been slowly eaten from within by special interest parasites steering legislation in their favor.