Great Depression Online Archive Issue:

Compulsory Philanthropy at All Costs

Great Depression Online
Long Beach, CA
September 25, 2009

Inside This Issue You Will Discover…

*** Heaving Leaders into a Ditch
*** Redistributed Poverty
*** Compulsory Philanthropy at All Costs
*** And More

Heaving Leaders into a Ditch

Sometime in early 1848 French poet Alphonse de Lamartine had a change of appetite.  For whatever reason, he no longer took to gobbling up frog legs but to gobbling up the new, forward thinking, ideas of the day. 

It all seemed so interesting, exciting, and enlightening at first.  Yet the more he indulged, the more he went mad.

It was as if Lamartine had been bitten by a rabinous dog.  And in a sense he had been.  The rabinous dog being not that of a French poodle…but that of the gospel of Karl Marx. 

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This was little cause for alarm to most.  For all Frenchmen seemed to be foaming at the mouth at the time.  Again, for the second time in 50-years, they’d gone a little crazy and heaved their leaders into a ditch. 

Both times an economic backslide provoked the hubbub.  Moreover, both times the makings of man made a great mess of things. 

Redistributed Poverty

With King Louis Philippe thrown out on his backside Lamartine and a bunch of provisional government no-it-alls began ruling the land.  They laid down diktats and decrees of Marx to punish the evil rich, abolish poverty, and spread the wealth to those who didn’t earn it. 

Yet to their disbelief and dismay the delusional visions of Marx didn’t bring about the Garden of Eden.  Instead they brought about the hell of redistributed poverty.

Another Frenchman, this one named Frederic Bastiat, captured the folly of the experiment with commonsense and wisdom…

“Here I encounter the most popular fallacy of our times.  It is not considered sufficient that the law should be just; it must be philanthropic.  Nor is it sufficient that the law should guarantee to every citizen free and inoffensive use of faculties for physical, intellectual, and moral self-improvement.  Instead, it is demanded that the law should directly extend welfare, education, and morality throughout the nation.”

In the end, our tragic antagonist Lamartine got just what he deserved.  He lived out his golden years in poverty, on the French Government dole, basking in the glories of redistributed poverty.

Compulsory Philanthropy at All Costs

“No good deed goes unpunished,” said Clare Boothe Luce.  Good grief, she wasn’t kidding…

Several weeks back we reported on the FDIC Disaster in the Making.  On Tuesday we learned what the folks in charge want to do about it…they want to punish the banks that acted with prudence, integrity, and trust during the bubble years to bailout the banks that behaved like reckless wastrels.

“The agency [FDIC] is considering borrowing billions from healthy banks,” reported AP.  “Alternatively, it may impose a special fee on the banking industry.

“Each option carries risk: Drawing money from healthy banks would take dollars out of the private sector, making that money unavailable for investment in the weak economy.  But charging the whole industry a fee to replenish the fund could push weaker banks toward failure.”

Here we’ll pause to offer a question: How does a recession become a depression?

Answer: Weak banks aren’t allowed to die.  Instead the government props them up and they drag the economy down for years to come.

Such is the state of government and banking in America during these early days of the 21st Century...where smart and clever fellows painted themselves into a corner…where compulsory philanthropy at all costs is employed to get them out.

‘“The bottom line is, there’s no good solution,’ said Jaret Seiberg, an analyst with the research firm Concept Capital.  ‘This is a fight over which option is least bad.”’

Here we go again.

Sincerely,

M.N. Gordon
Great Depression Online

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Notes from the Investment Underground.

 

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