Spending Spree

" The collapse of our banking mortgage and automobile manufacturing industries have forced the Obama administration. Into -- spend spend spend remedy mode. Believing that spending more as the way out of this recession. What do they have to show for the record unemployment record bank failures. A looming second this time commercial mortgage crisis and serious talks about potential collapse of the dollar. My next guest Robert higgs as a senior fellow on political economy for the independent institute and editor of the institute's quarterly journal. The independent review he argues. While running up of government spending. Is not a sensible way out of the recession Robert. My good friend professor -- welcome back to freedom watch your heritage don't let -- be here thank you don't the people in Washington know. That the Hoover FDR. Spend spend spend. Extended the eight the depression from 1929. To 1946. Or 48. Whenever it ended then haven't they learned the lessons the government borrowing and spending makes things worse rather than better."

" Unfortunately good judge they've learned all the wrong west of the new deal in the Great Depression though. As more common figure than say that what was wrong with the Great Depression was not -- the action taken but that they were -- That the new deal should have done what it. Yet but they've done it on a bigger scale -- more --"

" Beat the -- new deal did some money horrendous things to freedom. There were they the codes of the various industries that major charge a certain amount of money. I remember reading about it may even be in your -- crisis and Avaya pennant a dry cleaner in Jersey City, New Jersey. Who charged 35 cents instead of the prescribed forty cents. To clean and pressed a man's suit of clothing. He was convicted in a federal court in Newark and spent three months in jail. For trying to under charges competition. By five cents it do you think that we are in for. That level. Of micro managing the economy by bureaucrats in Washington. In this present recession."

" Well unfortunately we're moving in that direction right now we part of of course with with various efforts to. As -- were gonna get credit. Being expanded to it and they the beginning of all they -- most people noticed was the last. September when a so called. Credit breeze. Or credit crunch took place then the government the first step -- particularly if they don't -- this effort were. Directed it. As getting credit markets working again but very quickly of course the government. And take other action then. And ended -- it's taking ownership of the 600 or so bank. And there are partial ownership by you -- Purchasing preferred share instead of purchased -- the so called -- else that there's our program was that. Intended to permit and and now the upshot of bad most recently is that the government has begun to actually that the compensation. Well bank managers in them the banks that receive larger Al."

" You know this this TARP program as one of the biggest frauds one of the biggest bait and switch is have ever seen. I read the documents that evidenced. The purchase by the Treasury Department. Of the preferred shares of stock this goes back to September and October of oh wait we're in the Bush Administration here. This is one Henry Paulson went to George Bush's of the sky is falling. Give me a blank check for 700 billion dollars and I'll I'll stop mortgage foreclosures well we know what they did. The board shares of stock from bank some banks wanted to catch some banks did. And nothing was in those documents that said. As a result of our minority ownership will put aside General Motors and AIG when the feds have a majority ownership as a result of our minority ownership. We can control management decisions comes the Obama administration. Six months later in February and may enact legislation that says you know that money. That we gave you a return -- the -- six months ago or even if we only own a minority of the stock we can control salaries and we can control management decisions. I mean that is. Fascism private ownership but government control and it was done. After the fact it was done retroactively. Would those banks have even taken the money had they known the offense could control salaries and investment decisions."

" Well I'm sure that that this is a very thorny issues were where the bank of course but he is the last thing that bank manager ones that have somebody else controlling their cup. Company's direction and particularly. Backing away -- like it buy it better though but. Even more ominous judges that now the bad. Is proposing. That didn't have the authority. To control the compensation. Or manager in our bank. I -- actually eat now thanks banks that got no federal assistance whatsoever."

" Well will this madness never end Robert higgs thanks for joining us on freedom watch your welcome --"