The Free Market is the Grass-Roots Market

Liberals appear to believe that government creates wealth. The opposite is true. Private enterprise creates wealth. Workers are paid $20/hour only if they produce more than $20/hour in goods or services. Jobs appear only where that can be done. Resources and human labor are directed to where society is willing to pay for them. The free market is a grass-roots market where labor and resources are directed by the needs and desires of individuals. For government to do with central planning what the free market does with its dispersed/distributed power, it would need infinite knowledge. How else would it be able to analyze all the needs and desires of all the citizens, balance that knowledge with available resources and efficiently direct human and physical capital to where it does the most good?

Even the private sector jobs that are created in response to public spending are doomed. Any unnecessary public spending goes where the private sector would not have sent it. The jobs created in response to that public spending are therefore dependent on continued stimulus for their survival. A good case in point is the construction, real estate and lending boom-gone-bust created by Greenspan’s ultra-low interest rates supported by federally mandated liberal loan policies. The subsidy to debt was a subsidy to housing/commercial real estate, which created the unsustainable. Let’s not keep making this mistake.

When I brought up the free-market to a UI professor, he sharply told me “don’t talk to me about free markets, I am a finance prof”. Well, I still have some questions for you. Have you even read the Austrian Economists? Why did the Austrian/free market economists predict things like the housing boom/bust while you Keynesians didn’t see it coming? Why are you not sounding the alarm on the public spending trap we are getting ever more securely lodged in? European countries are at the point where their debt will be downgraded if they don’t cut public spending, and they will face downgrade if they do cut public spending because their economies are now so dependent on it. It is an ugly place to be and we are only different in the sense that we hold the world reserve currency and will try to print our way out of the mess we are in. Even a Ph.D. should know where that ends.