The economic crisis showed the instability of banks, financial markets and governments. It also showed the willingness of governments to make sure the bills of their behavior are being paid for by the people. But what exactly caused the crisis? Was it capitalism, like many Europeans claim? And who is responsible? And how could we prevent a next crisis?
Let’s have a look first at what it is that exactly caused the crisis. According to socialists it’s greed. But is greed really something negative? What would the world be like if no one was greedy? Isn’t it the desire to have more purchasing power or more comfort, that has been fundamental to our current welfare? And even if our policies aim to ban greed, would it be possible? No, of course not, because human nature is based on pursuing high performance and achieving higher accomplishments every single day.
The real cause of the crisis has been with us for decades, though it came to the surface in the first decade of this century. Central banks like the FED and the European national banks, and since 1998 the ECB, have been manipulating money for decades. Money wasn’t based on a ‘hard’ standard, like gold, so that central banks had the opportunity to print money endlessly. Alan Greenspan for example, called for a gold standard in Ayn Rand’s book ‘Capitalism: the unknown Ideal’, but started manipulating and printing when he became chairman of the FED. We all can realize that every dollar or euro that is being printed brings down the value of the dollars or euros that already exist. Therefore, printing money causes inflation and inflation is theft.
The policy of the central banks came hand in hand with overspending by most Western governments. Most of them spend billions of euros more than they receive, every single year. Well, if I borrow the money to buy an expensive car and I can’t pay it back, I’m in serious trouble. The car will be seized first, then my belongings and if necessary my house and I will end up in jail. But what about those in power? What about those who tax half of our incomes to spend it on whatever they like and are still able to create massive debts? Will they end up in jail?
Decades of money manipulations and overspending really came to the surface when Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people. Former U.S. President George W. Bush continued Clintons policy by signing the American Dream Downpayment Act of 2003. When signing this Act, he stated: ''One of the biggest hurdles to homeownership is getting money for a down payment. This administration has recognized that, and so today I'm honored to be here to sign a law that will help many low-income buyers to overcome that hurdle, and to achieve an important part of the American Dream. ''From that moment, many people with a lower income that could never pay the value of their house back, bought a house with a mortgage at Fannie Mae and Freddie Mac. The bubble would burst at 2007.
Well, after learning such a hard lesson, what would be your solution? Financial responsibility right? Taking the losses you caused and move on by never spending more than you receive. Well, the European political elite doesn’t agree with you. They keep spending billions more than they receive. Their solution is more rules and regulations for financial markets and banks, and, of course, not taking their losses but financing those losses by borrowing even more money! And current U.S. President Obama? He doesn’t agree with you either. In a response to the outcomes of the crisis, like high unemployment, President Obama decided to 'stimulate' the economy by borrowing even more money as well. Well, unemployment remained high and the only thing that got stimulated was the public debt: more than 14 trillion dollars.
Would you call overspending governments and overprinting central banks capitalism? Would you call a President who promises a house to those who can't afford it capitalist? Would this crisis be possible if governments didn’t have the right to spend more than they receive and if central banks didn’t exist? No, of course not. Only individualism would not let those who are not responsible pay for someone elses irresponsible behavior. If you overspend, it’s your problem and it’s you who will face the consequences. Individual hard working tax payers should oppose collectivism and refuse to pay the bills for irresponsible behavior of their elite.
