Former President George W. Bush was wrong on many issues, but at least one of his comments was right on the money. At a private fundraiser in Houston in July 2008, during one of those many unscripted moments, Bush opined on some of the reasons behind the then-nascent economic decline. His simple summary was that "Wall Street got drunk."
While metaphorically true in a sense, what he failed to mention was that the government was primarily responsible for supplying the cheap booze to the bankers. Wall Street did indeed get drunk on credit-default swaps, mortgage-backed securities and easy money through artificially controlled low interest rates. None of this would have been possible, however, without the Federal Reserve's control over America's paper-based monetary system and the existence of a fractional-reserve banking, which creates credit out of little more than thin air. Frat boys can't get drunk without access to cheap (or free) beer, and bankers can't compound investments and risky loans without a "lender of last resort" who is willing to finance the shenanigans.
Centralized economic planning may work well in the short term for a select few, but nobody is smart enough to manage the economic interactions of hundreds of millions of people over many years. Today's dollar being worth only 4 percent of the 1913 dollar, when the Fed took it over, is just one evidence of this truth. A wise parent would not give their alcohol-guzzling teenager the keys to the new family car, and yet America's financial fate has largely been entrusted to similarly reckless individuals.
Now that the bubble has begun to burst, the sane segment of the American population believes that the winos in Wall Street need to sober up. Last I checked, however, nowhere in Alcoholics Anonymous' 12-step program will you find the counsel to keep drinking while on your path to recovery. And yet, oddly enough, this is precisely what the federal government is trying to do to allegedly fix the economy. Bailouts, stimuli, subsidies and increased spending are all attempts to allegedly sober up Wall Street ... by sending them a few kegs of beer. How is this solving anything?
Just as one cannot sober up through increased alcohol consumption, so it is with the federal government's economic health. We cannot pull ourselves out of debt by borrowing or printing more money. It doesn't work for individuals, and it doesn't work for governments. America needs its own 12-step program for financial wellness, and leadership with the integrity and tenacity to see it through.
While a gradual process of overcoming an addiction is often beneficial, sometimes going cold turkey is the best option available. To be sure, the immediate termination of the many spending programs being implemented under the umbrella of the stimulus, bailouts and federal budget appropriations would be political suicide. The masses are clamoring for bailouts and stimuli of their own and are not likely to look favorably upon somebody telling them no.
But the best thing for a drunkard's well-being is the companionship of a firm and loving person who will tell them no, even when it's tempting and easy to choose otherwise. Wall Street got drunk, and the government has been the enabler. Supplying more money, loose credit and low interest is the worst thing that we can be doing. It's time to take away Wall Street's car keys: no Federal Reserve, no fractional-reserve banking, and no federal stimuli or bailouts.
Connor Boyack is the communications coordinator for the Utah County Campaign for Liberty.