[I was up from 2am to 4am this morning. I managed this post-of-dubious-value. Everything in quotes is dripping with sarcasm-- and imagine an eye-roll for good measure.]
My insights: I think that most of the time people don't understand completely where Ron Paul is going. He's not very good at seeing his logic through, or creating a clarifying point that brings it all the way around. He does a much better job of this in his written materials.
For example in this case, in the question of the automobile industry, he talks about the liquidation of mal-investment. If a company goes under its assets don't just disappear. People talk like the buildings and the people are just going to evaporate in a cloud of ash. They are rather picked up by new investors, things are cleaned up and a younger, leaner, fresher company picks up the mantle without all the baggage that was there before.
I liken it to the brushfires. At some point the system has to clear itself. Preventing the fires only makes it more devastating when they finally do come. Not a perfect analagy, but you get my point.
Another thing that makes my jaw hit the floor is the idea that without banks somehow no one would be able to buy a home or a car. If the banks disappeared tomorrow everyone would be living in the woods around giant ghost towns. There are different ways around it. Without huge lines of credit, customers and products would have to find different ways to connect. I think it would make prices come down. Ron Paul makes this point with regards to the Health Care sector in his book The Revolution, that before the government stepped in hospitals had motivation to make their product affordable, and worked better directly with consumers.
Same thing with cars. If the banks evaporated tomorrow, how would you get a car. Why, you would save up and buy a reasonably priced used car. Bad for the new car lot, but proportionately good for the used car lot. The resources, the money, the consumer did not evaporate, they just moved to a different sector. A job may be lost, but another job is created.
If the banks disappeared tomorrow, completely, I would cry with joy. Oh, it would suck when I had an emergency and needed a loan. Oh, waitaminit, I need to think around the problem better. How about SAVING up first and living frugally? That's what ultimately happens when a family becomes over-extended and their credit tanks anyway.
More than half my income goes to interest and taxes. Mostly interest. I'm an idiot. Years ago, when I should have made painful decisions about my business, faced up to the pain, lived leaner, I instead went into debt to subsidize my idiot ways. The availability of easy credit prolonged the stupidity and over-spending. It's a micro-cosm of what Ron Paul is talking about. I've spent the last year working to get to a point where my income is going more into the life of my family. And slowly I'm getting there. I want to get to the maximum level of efficiency there.
By the time my mortgage is done my house will have cost at least double. I will have spent ten years "building" my house (vicariously) and another ten years getting nothing, just paying interest to someone who neither built nor labored nor finished any material product. How is that a good system? Is there a better way?
I wonder, if you took a city of 20,000 people, how much of the money that is spent on housing goes to ownership (principle) and how much goes to interest? What percentage of the homes are owned outright? Are we just squatters in the land of our forefathers? It seems to me that the banks printed a bunch of paper, bought everything, and made everyone a half-slave through usury.
The banks would have you believe that without them humanity would be doomed to live in the forests in twig huts and tents. If it weren't for them you'd have to save your whole life to buy a house. Yes, maybe you'd have to live super humbly for about ten years and buy only a modest dwelling outright. But at least it wouldn't cost double, and your kids wouldn't be indentured servants.
And what would it look like if my countrymen en masse wised up and stopped using the so-called "services" of the banks? It is after all a product and we can't be forced to use it (nevermind that this is what's happening indirectly through the bailouts-- we have to pay back a loan through taxation-- our "representatives" signing on the dotted line for the loan either from the Fed or foreigners). But back to my "no thanks to the banks" idea. What do you think that would look like? Why, the banks would howl to high heaven about how the whole system is crashing down and how everything is going to go to hell without them.
How can that possibly be? Let's not forget the nature of this entity. It is a being that by its very nature takes more than it gives back. It takes double back, I would daresay, through the "miracle" of compound interest. When I go into a bank nowadays it gives me the creeps. Every polished desk, every marble tile, represents the sweat of some working family. I feel like I am walking on the souls of the working class.
Well, back to my business. Ever since I stopped using credit of any kind, and paying up front for everything, paying as I go, things are just peachy. I reigned in my spending to super-thrifty levels. I started paying off my debts at an aggressive pace. I bought a used car with cash up front. It has brought me peace and a measure of prosperity.
Disclaimer: I am not presenting this as exactly my viewpoint. Or saying that you should accept it as yours. I think that it is worth looking at. I am a political explorer. Ron Paul's movement (a restoration of the American Revolution as he says) resounds with me. I am on the brink of building out on this and asking a new round of questions.
Looking back at my first year in College, I had to take American History 101 (or somesuch). I remember on the first day the professor came out and began pointing out all the great things that the government does, listing all sorts of government programs, and how we should be grateful. At the time I cocked my head a bit, since it seemed a little off topic. But now it makes sense-- the relationship of universities and the government.
In my opinion, colleges are agents of the banks to enslave young people through student loans.
I was watching Colbert Report and he introduced Bob Barr (the Libertarian Candidate) as "the man who wants to shrink government to the size of a postage stamp". That's not fair. If the size of goverment were rolled back to the size it was twenty years ago, it would be about half it's current size. The "postage stamp" statement skews the real issue: what is the proper role of government. Government does do some things well. This is an entirely different topic.
I have started to warm to Eric Danley's view that there are some things (like switching to more efficient green energy perhaps) that need a nation-wide solution, and are not likely to be implemented by individual businesses. I'm still puzzling this out as best I can.