Given the recent passage and signing of H.R. 1424, the Emergency Economic Stabilization Act of 2008, I think it’s appropriate to give Murray Rothbard’s take on what they are doing.

From America’s Great Depression, page 19 and 20:

If government wishes to see a depression ended as quickly as possible, and the economy returned to normal prosperity, what course should it adopt? The first and clearest injunction is: don’t interfere with the market’s adjustment process. The more the government intervenes to delay the market’s adjustment, the longer and more grueling the depression will be, and the more difficult will be the road to complete recovery. Government hampering aggravates and perpetuates the depression. Yet, government depression policy has always (and would have even more today) aggravated the very evils it has loudly tried to cure. If, in fact, we list logically the various ways that government could hamper market adjustment, we will find that we have precisely listed the favorite “anti-depression” arsenal of government policy. Thus, here are the ways the adjustment process can be hobbled:

1. Prevent or delay liquidation. Lend money to shaky businesses, call on banks to lend further, etc.
2. Inflate further. Further inflation blocks the necessary fall in prices, thus delaying adjustment and prolonging depression. Furthercredit expansion creates more malinvestments, which, in their turn, will have to be liquidated in some later depression. A government “easy money” policy prevents the market’s return to the necessary higher interest rates.
3. Keep wage rates up. Artificial maintenance of wage rates in a depression insures permanent mass unemployment. Furthermore, in a deflation, when prices are falling, keeping the same rate of money wages means that real wage rates have been pushed higher. In the face of falling business demand, this greatly aggravates the unemployment problem.
4. Keep prices up. Keeping prices above their free-market levels will create unsalable surpluses, and prevent a return to prosperity.
5. Stimulate consumption and discourage saving. We have seen that more saving and less consumption would speed recovery; more consumption and less saving aggravate the shortage of saved capital even further. Government can encourage consumption by “food stamp plans” and relief payments. It can discourage savings and investment by higher taxes, particularly on the wealthy and on corporations and estates. As a matter of fact, any increase of taxes and government spending will discourage saving and investment and stimulate consumption, since government spending is all consumption. Some of the private funds would have been saved and invested; all of the government funds are consumed.¹⁵ Any increase in the relative size of government in the economy, therefore, shifts the societal consumption–investment ratio in favor of consumption, and prolongs the depression.
6. Subsidize unemployment. Any subsidization of unemployment (via unemployment “insurance,” relief, etc.) will prolong unemployment indefinitely, and delay the shift of workers to the fields where jobs are available.

These, then, are the measures which will delay the recovery process and aggravate the depression. Yet, they are the time-honored favorites of government policy, and, as we shall see, they were the policies adopted in the 1929–1933 depression, by a government known to many historians as a “laissez-faire” administration.

Since deflation also speeds recovery, the government should encourage, rather than interfere with, a credit contraction.

¹⁵In recent years, particularly in the literature on the “under-developed countries,” there has been a great deal of discussion of government “investment.” There can be no such investment, however. “Investment” is defined as expenditures made not for the direct satisfaction of those who make it, but for other, ultimate consumers. Machines are produced not to serve the entrepreneur, but to serve the ultimate consumers, who in turn remunerate the entrepreneurs. But government acquires its funds by seizing them from private individuals; the spending of the funds, therefore, gratifies the desires of government officials. Government officials have forcibly shifted production from satisfying private consumers to satisfying themselves; their spending is therefore pure consumption and can by no stretch of the term be called “investment.” (Of course, to the extent that government officials do not realize this, their “consumption” is really wastespending.)

Sound familiar?

H.R. 1424 [PDF][HTML], page 300:

SEC. 503. EXEMPTION FROM EXCISE TAX FOR CERTAIN WOODEN ARROWS DESIGNED FOR USE BY CHILDREN.

(a) In General- Paragraph (2) of section 4161(b) is amended by redesignating subparagraph (B) as subparagraph (C) and by inserting after subparagraph (A) the following new subparagraph:

• • `(B) EXEMPTION FOR CERTAIN WOODEN ARROW SHAFTS- Subparagraph (A) shall not apply to any shaft consisting of all natural wood with no laminations or artificial means of enhancing the spine of such shaft (whether sold separately or incorporated as part of a finished or unfinished product) of a type used in the manufacture of any arrow which after its assembly–

• • • `(i) measures 5/16 of an inch or less in diameter, and

• • • `(ii) is not suitable for use with a bow described in paragraph (1)(A).’.

(b) Effective Date- The amendments made by this section shall apply to shafts first sold after the date of enactment of this Act.

That’s not all… just perhaps the most ludicrous. The New York Post gives us more:

WASHINGTON - Here, little piggies!

Congressional deal-brookers yesterday slopped a mess of pork into the $700 billion financial rescue bill passed by the Senate last night - including a tax break for makers of kids’ wooden arrows - in a bid to lure reluctant lawmakers into voting for the package

Stuffed into the 451- page bill are more than $1.7 billion worth of targeted tax breaks to be doled out for a sty full of eyebrow-raising purposes over the next decade.

“This is how Washington works,” said Keith Ashdown of Taxpayers for Common Sense, a Washington research group. “A big pot of pork is their recipe for final passage.”

The special provisions include tax breaks for:

• Manufacturers of kids’ wooden arrows - $6 million.
• Puerto Rican and Virgin Is- lands rum producers - $192 million.
• Wool research.
• Auto-racing tracks - $128 million.
• Corporations operating in American Samoa - $33 million.
• Small- to medium-budget film and television productions - $10 million.

Another measure inserted into the bill appears to be a bald-faced bid aimed at winning the support of Rep. Don Young (R-Alaska), who voted against the original version when it went down in flames in the House on Monday.

That provision - a $223 million package of tax benefits for fishermen and others whose livelihoods suffered as a result of the 1989 Exxon Valdez oil spill - has been the subject of fervent lobbying by Alaska’s congressional delegation.

I’ve got nothing…

Dodd Amdt. No. 5685

H.R. 1424: Genetic Information Nondiscrimination Act of 2008

Both votes, as one would expect, were the same.

Here is footage from the response by leaders of the Senate after the passage. I apologize for the sync. I ripped it from a Realaudio stream and am too lazy to figure out why the conversion is off.

These guys are really self absorbed ass hats. They pushed for programs which caused this mess and now they blame others even when the evidence is overwhelming. The talking heads in the MSM generally just parrot the Democrats and Republicans condemnation of the supposed free market we have and their call for fascism. And what is that Dodd said? “America I hope saw Congress, the United States Senate, acting as the forbearers and the Founders intended it to act.” I’m not sure but voting completely contrary to their constituents desires doesn’t seem to be what the Founders intended in a representative democracy.

H.R. 1424: To amend section 712 of the Employee Retirement Income Security Act of 1974, section 2705 of the Public Health Service Act, section 9812 of the Internal Revenue Code of 1986 to require equity in the provision of mental health and substance-related disorder benefits under group health plans, to prohibit discrimination on the basis of genetic information with respect to health insurance and employment, and for other purposes.

451 PAGES, up from the H.R. 3997’s 110 and the original’s 3.

Senators Voting “Nay” on Federal Intervention in the Financial Markets: Wednesday, Oct. 1, 2008:
Sen. Wayne Allard (R-CO), Sen. John Barrasso (R-WY), Sen. Sam Brownback (R-KS), Sen. Jim Bunning (R-KY), Sen. Maria Cantwell (D-WA), Sen. Thad Cochran (R-MS), Sen. Mike Crapo (R-ID), Sen. Jim DeMint (R-SC), Sen. Elizabeth Dole (R-NC), Sen. Byron Dorgan (D-ND), Sen. Michael Enzi (R-WY), Sen. Russ Feingold (D-WI), Sen. James Inhofe (R-OK), Sen. Tim Johnson (D-SD), Sen. Mary Landrieu (D-LA), Sen. Bill Nelson (D-FL), Sen. Pat Roberts (R-KS), Sen. Bernie Sanders (I-VT), Sen. Jeff Sessions (R-AL), Sen. Richard Shelby (R-AL), Sen. Debbie Stabenow (D-MI), Sen. Jon Tester (D-MT), Sen. David Vitter (R-LA), Sen. Roger Wicker (R-MS), Sen. Ron Wyden (D-OR)

Official roll call for vote number 213.

Both of the senators from the state of New Jersey where I am a resident voted in the affirmative. They’ve already received emails indicating my displeasure with their actions.

To Frank Lautenberg:

I am disappointed by your vote in the affirmative on H.R. 1424. I will be doing what I can to to assure you are not reelected in November.

“We will not let this economy fail” -Senator Reid
“This bill creates jobs here at home.” -Senator Reid
“Inaction is not an option.” -Senator Reid
“America I hope saw  Congress, the United States Senate, acting as the forbearers and the Founders intended it to act.” -Senator Dodd

http://news.yahoo.com/…

Hoyer, though, said on NBC’s “Today” show he was concerned that the tax issues could complicate the chances of final congressional passage when the legislation comes back to the House floor for a vote.

“There’s no doubt the tax package is very controversial,” he said, adding that “there’s no doubt in my mind that the Senate added this because they thought that’s the only way they could get it passed.” He said he wasn’t pleased the tax provisions were attached to the bill.

Adding a set of popular business tax breaks and legislation to prevent more than 20 million middle-class taxpayers from feeling the bite of the alternative minimum tax promised to win House GOP votes for the plan even as it angered moderate “Blue Dog” Democrats concerned about the tax cuts adding to the deficit.

I reported earlier on the some of the changes made to the House amendments by the Senate. Unfortunately the only way to find out is through piecing together random news articles as at last I checked the actual bill to be voted on was not publicly available. So… I hadn’t seen that the AMT was part of this supposed tax reduction. We’ve all have heard the horrors of the AMT and yet Congress has been unable to do anything about it until now? It’s not even a carrot for passage, as a real tax reduction would be, but the promise not to use the stick… as hard. Another example where government regulation has lead to an unforeseen problem that would simply not have existed in any sort of resemblance of a free market. Now they are trying to sweeten this poison bill with it. Getting rid of the AMT is a great idea… but not on the back of one of the most egregious corporatist bills to come our way in a generation.

Speaking of negative unforeseen consequences.

http://www.bizjournals.com/…

The U.S. Securities & Exchange Commission Tuesday decided to ease “mark to market” accounting rules which have hurt banks, mortgage lenders and the housing sector during the downturn.

Mark to market is a Sarbanes Oxley accounting rule that requires holdings, assets, and loans be valued at their current value. It was aimed at keeping company’s books on the up and up but it has devastated banks and mortgage lenders in the housing slump.

On Tuesday the SEC said companies and financial institutions have some leeway in assessing value, not just the current market, which is of course way down.

There is also some talk in Congress of a temporary or permanent mark to market repeal to allow for a more long-term valuation of assets and loans.

What a surprise? Government regulation which manipulated the market values of assets caused the market to negatively react to that misvaluation. It’s unfortunate there isn’t a way to translate the economic distortion into something the politicians could understand. Like a punch in the face.

I know that many of us were deeply disappointed when the U.S. House of Representatives today failed to pass Treasury Secretary Henry Paulson’s emergency stabilization plan. We believe that the defeat of this plan is not only bad for the markets and for our firm - but a dangerous course for the country with negative consequences for people far from Wall Street.

Indeed, following the vote today, the financial markets sent Congress a loud and clear message about the consequences of Congress’s failure to respond to the financial crisis at hand - sending the Dow down more than 700 points. In the aftermath of the vote and the market’s reaction, the leaders of both parties have vowed to regroup and consider how they can bring the financial market rescue package back to the floor of the House for successful reconsideration.

We believe it is critical that members of Congress hear about the importance of passing a plan this week.

If you share this view, I encourage you to call your Congressman and Senator at (202) 224-3121 and let them know how important this plan is for the American economy.

Translation: “We fucked up and now you need to bail us out or it’ll hurt you too. We promise.”

The individual who released this received 13.33 times his salary as his bonus in 2006 and after all other forms of compensation are calculated in: over 20 times. Much of that was stock. My guess is a bailout by the taxpayers would significantly impact his bank account. I think it’s safe to say that likely has a significant impact on his opinion. I’m not seeing any hesitation, no condemnation of the CRA, no concern for artificially low interest rates, moral hazards or the Federal Reserve System.

If the company he works for can’t keep itself afloat without interference by the government it deserves to fail.