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Thursday, August 28, 2008

In Denver, the End of Capitalism

David Harsanyi describes perfectly the philosophical underpinnings of the Democrat National Convention:
"buried beneath the idealistic policy talk in Denver is an ugly detail: It's about coercion.

[Gov. Brian] Schweitzer claims "we must invest" in projects he likes, he means government will take it and invest it for you. You see, you must. Then Schweitzer claimed (in a half-truth) that Republican nominee John McCain voted "against" solar energy, biofuels and wind energy.

Which is weird because I could swear my neighbor has solar panels, so they must be legal. I've seen windmills. So I suppose that Schweitzer meant that McCain voted against some federal boondoggle for wind and/or solar energy.

Sen. Hillary Clinton later chimed in that she would force energy companies to invest in the projects deemed worthy of the common good. (Imagine if your business were told how it "must" invest its money.) She claimed Americans "give" windfall profits to oil companies. No, we don't "give" them anything; we pay them for a product.
Here's the point. Every time you hear some politician talking about how they want to "invest" in this or that amount of money for some government boondoggle, just know that every dollar the government "invests" of your tax money, is a dollar which be cannot spent by you or your family on new clothes, tires, computers or other goods and services. The government does not produce capital, it merely sucks up capital from the private market that could have contributed to the expansion of the economy.

Additionally, when the government "invests" money, no real wealth has been created, because, undoubtedly, the government will not earn any return on its "investment." You can be assured that a large portion of the "invested" funds will be lost, diverted, squandered and/or end up lining the pockets of crooked politicians across the land. The reason is simple. As Henry Hazlitt put it:
"there is a difference between the loans supplied by private lenders and the loans supplied by a government agency. Each private lender risks his own funds...If money is lost he must either make good out of his own funds or be forced out of business. When people risk their own funds they are usually careful in their investigations to determine the adequacy of the assets pledged and the business acumen and honesty of the borrower."
"If the government operated by the same strict standards, there would be no good argument for its entering the field at all. Why do precisely what privately agencies already do? But the government almost invariably operates by different standards. The whole argument for its entering the lending business, in fact, is that it will make loans to people who could not get them from private lenders. This is only another way of saying that the government lenders will take risks with the people's money (the taxpayers') that private lenders will not take with their own money."
Is it possible to get Hazlitt's book distributed in Denver before it's too late?

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