ONE WEEK Before Collapse, Cain Says Economy Great

by Tom Woods

October 2, 2011

Amazingly, Herman Cain’s star continues to rise, which means Republicans think it’s all right for someone to endorse Mitt Romney, as Cain did, to support TARP (it’s not his fault, say supporters — he somehow had no idea it would be used to “pick winners and losers”!), and to be completely clueless about the condition of the economy right up to the moment of the collapse.

Now this really takes the cake: here is Herman Cain on September 1, 2008, saying the economy is in terrific shape.

Here’s what happened over the following two weeks:

– Fannie Mae and Freddie Mac were taken over by the U.S. government (Sept. 7);
– Merrill Lynch was sold to Bank of America;
– Lehman Brothers declared bankruptcy;
– The Fed bailed out AIG;
– Washington Mutual was sold to JP MorganChase;
– Treasury Secretary Paulson said the economy was so bad that $700 billion must be spent on bailouts immediately; otherwise, warned Ben Bernanke, “we may not have an economy on Monday.”

On September 1, 2008, Herman Cain was laughing at the “imaginary recession.” That is how clueless this man is. That is also how clueless lots of Republicans are, since they think a guy this hopeless would make a good president during a time of general collapse, a collapse he didn’t even slightly see coming and whose nature escapes him completely.

And when the chips were down, Cain reflexively supported the Establishment by embracing the grotesque and indefensible TARP. He lectured “free-market purists” while doing it. But next time he’ll be a maverick and defy the Establishment, right?

Meanwhile, Ron Paul specifically warned in 2001 that Alan Greenspan and the Federal Reserve, whose NASDAQ bubble had just burst, were in the process of creating a housing bubble. Here he is saying it:

He made comparably prescient statements over the next several years, while every single other Republican candidate in the running was either mute on the economy or actually thrilled with it. Thus Joe Scarborough asked him: “How could it be that you knew this on the Banking Committee in 2003, and nobody else did until after the collapse?”

We are facing a serious, long-term and systemic problem, and all the Cains, Gingrichs, Romneys, and Perrys of the world can come up with is a little regulatory tinkering and some tax reform. This is completely irrelevant to the problems we face right now. We need sweeping, systemic changes, carried out by a real supporter of the free market who sees the whole picture, not trivial tinkering by some empty suit.

Yes, I know, we are not supposed to like Ron Paul because of his foreign policy. By definition, anyone who dissents from a foreign policy cooked up and supported by Hillary Clinton, Mitt Romney, Joe Biden, Mitch McConnell, the New York Times, and the Washington Post — nothing but genius there — must be some kind of loon. What’s more, it’s just super-conservative to blow trillions of dollars, supposedly to fight Islamic radicalism, on a horrendously destructive war against the two-bit nobody who ran a secular Iraq — while our own country is drowning in red ink. That makes sense.

The misnamed “Defense” Department (misnamed because after 9/11 the federal government created an entirely new department, Homeland Security, whose stated purpose was to in fact defend the country) is the one government program conservatives may never question. This one is run by omniscient angels who don’t even need to be audited. This one has no entrenched interests of its own that it might pursue at the expense of the common good. That’s true only of the farm lobby and the education bureaucracies. This is the Department of Defense, citizen. Trust them. USA! USA!

Can we put this silliness aside for just four years?

Can conservatives for once realize that their “limited government” slogan means limited government, not limited government plus a ludicrously far-flung military presence at odds with every shred of advice from the founding fathers about the incompatibility of permanent war with the health of a republic? Might they consider the slight possibility that the federal government is not just deceiving them about health care but about foreign affairs as well?

Can we do this just long enough to let Ron Paul, armed with more economic knowledge than the rest of the Republican field combined (I realize this is the faintest praise known to man), steer the country back in the right direction?

Original article can be viewed here

About Tom Woods

Thomas E. Woods, Jr., is the New York Times bestselling author of 11 books. A senior fellow of the Ludwig von Mises Institute, Woods holds a bachelor’s degree in history from Harvard and his master’s, M.Phil., and Ph.D. from Columbia University. Read more »

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