The Forgotten Man

I finished reading this book a couple of weeks back. (Get it here) My recommendation is get it at the library, buy it from Amazon or borrow it. It is the most important book of its type of our generation.

The history of the Great Depression has been revised so drastically. We were all taught in school how FDR came in and instituted these programs, the Supreme Court tried to thwarted him and after all was implemented all was happy ever after. When looked at closer we see that recovery from the downturn that started the Depression was not realized until World War II.

The most relevant thing is the similarity to today. The most destructive thing that happened in the Depression was the attack on wealth. Taxes were structured simply to target income and wealth. The government made success an enemy. Class warfare was born as political tool. This is very relevant to today. Since Government intervention became such a large part of the plan special interest groups were born. There were always groups that aligned with parties in power, I don't mean to imply that wasn't so. Prior to this period though, the government did not hand out support to one group over another. Throughout our history since then, the spoils of won elections were power and goodies to friendly groups. My person opinion is that Roosevelt and his advisers did not set out to create this way of life, it developed over time.

I do not intend to portray Democrats (Progressives) of that era as conniving disingenuous schemers. I truly believe they believed that government regulation and intervention would be the boost that the average person needed to get over the hump toward success. Careful analysis though shows us that just as today when you set out to help poor people by forcibly taking others' property you hurt the very people you set out to help. You see, the rich are not going to be hurt by higher taxes. They are rich after all. What they will curtail is the actions that help society. They stop putting their capital at risk. Instead of starting or expanding a business, they put it into safer investments. Instead of loaning money to a start up corporation they may invest in government bonds that are tax free.

The relevance to today comes in the things that the Democratic party is planning if they win the White House and both houses of Congress. In the Depression the government decided that electrification was not progressing fast enough. Through the TVA and other such projects they went into competition with private enterprise. There were many companies making great en roads into spreading electricity. Over time these companies either went out of business or changed their business direction. This was tragic. When the crash came one of the few expanding sectors of the economy was energy. Being in direct competition caused them to not invest and be in direct competition with government.

Our equivalent to this is health care. Many companies today are investing in more imaginative health insurance plan. Flexible Savings Accounts are a way to do this. Some companies have gone to high deductible lower cost insurance that only covers high dollar procedures. The savings is turned back to the employees to be spent on day to day medical procedures. With a little loosening of the government lock other market based solutions could come forth. Opening up heath insurance across state lines would add competition and enable dollar savings that way. The 'Universal Health Care' plans being floated in this elections season can only lead to disaster. They will put the government in competition with private enterprise even more and drive more businesses out of the market. They did just that in the nineties when they bought up all of childhood inoculations. They set the price, they set the rules, and the suppliers got out. The logical result then and in the future is shortages. We cannot let that happen. We must empower the market. Only that will make Health care better.

I encourage anyone who may read this to read this book. Follow my link above or get it from the library, but read it. Our future is at stake.