Let us make it difficult: let us combine two themes, the phony explanations of the banking fiasco and the perverted cause of “country first.” The shorthand tags for these themes that I will use are “economy” and “politics.”

These represent a two-forked attack on the principles of the Founding Fathers. This government was created “to secure these Rights”, which are “Life, Liberty and the Pursuit of Happiness.” The Founders created the constitution “to secure the Blessings of Liberty to ourselves and our Posterity.” They were thinking of rational self-interest and individual liberty.

They were not talking about the blessings of regulation and a duty to serve the country rather than oneself. They were not talking about creating a government that would “spread the wealth” that pundits, politicians and courts wish to carry out today.

The messages of the presidential campaign and the alleged causes of the financial crisis share a huge common issue: the end of rational self-interest.

We are being told by pundits of both politics and economics that what we are suffering from is 1) greed and the death of capitalism and market failure, and 2) a lack of service to our country, not putting “country first.”

In the financial market we are, in fact, crashing from distortions of normal incentives – as Chris Powell said at GATA dot org, “There are no markets anymore, just interventions.”

Politics

You have no doubt been hearing John McCain's latest mantra of altruism, now in an ungrammatical form. (Altruism: unselfish regard for or devotion to the welfare of others.) A short time ago, it was “My country is first”, now it is a statement imputed to his opponent: “Me first, country second.” McCain has, in fact, spent all of his working life in government service, joining the Navy in 1958, a prisoner of war for six years, retiring in 1981, entering politics in 1982. His position is that the individual is subservient to the State.

When he was released by North Viet Nam, he found that he “belonged to his country” and that he would live only for the United States of America. Why would he not have said “I have served my country well, and now I will own and serve myself”?

As we shall soon see, his opponent agrees, Obama does NOT believe in selfishness.

McCain points the way, preaching unselfish service to society, the path to religion and moral surrender to a Fuehrer and his program, rather than the rational self-interest, honesty, productivity and individual pride that made America great. Obama echoes his message.

“Patriotism is . . . putting the country first, before party or personal ambition, before anything.” John McCain in Yahoo Parade

Not to be outdone, Barack Obama gives us his “Me Too”:

"I've got news for you, John McCain. We all put our country first," Obama said, rejecting the Republican notion that he put himself first. News at Yahoo .

We are running a strange contest. Does an unselfish person proudly make claims to be more unselfish than thou? No, he or she would just humbly out-do the others in unselfishness, by self-effacement and sacrifice. How is a competition in unselfishness heroic?

Update

Obama made a speech in which he says he does not hate the rich, but would actually want all of us to become rich. He adds that McCain is “making a virtue out of selfishness.” Hello! I don’t think so.

However, if McCain had recognized that virtue he would find himself in good company, per this quote from Adam Smith:

"Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of society, which he has in view. But the study of his own advantage naturally, or rather necessarily, leads him to prefer employment which is most advantageous to the society . . . . [H]e intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it." -- Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, bk. IV, ch. 2, 397, 399 (D.D. Raphael ed., 1991) (1776).

A couple of other historic quotes seem apropos:

"It is thus necessary that the individual should finally come to realize that his own ego is of no importance in comparison with the existence of the nation, that the position of the individual is conditioned solely by the interests of the nation as a whole."

"The greater the readiness to subordinate purely personal interests, the higher rises the ability to establish comprehensive communities... The state of mind, which subordinates the interests of the ego to the conservative of the community, is really the first premise of every truly human culture."

Both quotes from Adolph Hitler

If this persists it may fulfill a prophecy by Ayn Rand who, in her classic novel The Fountainhead , had her hero lamenting that "The world is perishing from an orgy of self-sacrificing."

Segue to the Economy

All of this is viewed against the background of government encouraging greedy lending for several decades (by CRA, fair lending laws, promoting an “ownership society” by the bully pulpit and low interest rates). In response, profit-seeking mortgage under-writers and lenders resorted to “creative lending” with loose borrower credit rating. However, in response to the higher risk, they began selling the mortgages and investors who bought them insure against risk.

Adding fuel to the fire, Moody's and Standard & Poors were busy rating the un-ratable. The bonds being traded which had sub-prime mortgages backing them were the proverbial pig, after the AAA rating was applied (the lipstick) no one seemed to suspect it was still a pig.

And finally the borrowers started finding that the bubble in house values was bursting. They began seeing their equity disappear, with the value of their property fell below their mortgage balance, just as their rates were reset. As they began defaulting on the loans, the mortgage servicers were forced to foreclose. This only added further downward pressure on home values.

The lenders, of course, had no idea it could end up this way. They were, of course, doing this out of pure selfishness and greed! What is new? The profit motive is always at work.

We must not forget the election cycle either. This mortgage crisis was hitting just as the 2008 presidential election campaign was reaching fever pitch. Now the chickens headed home.

A collision of several phenomena was about to hit: a banking crisis, a recession, thousands of families abandoning their homes, unemployment, finger pointing about the cause of it all. The AAA mortgage-backed bonds were crashing but the insurance on them was turning out to be worthless. A financial rescue plan was needed, first to keep banks from folding, and to keep the mortgage business field alive. Immense capital had to be assembled. An immediate tax increase was out of the question. It had to come directly from a huge increase of the money supply.

Meanwhile, to ensure that McCain is elected, the Republican administration is taking steps to ensure that you DO become subservient to the State and sacrifice your liberty and prosperity and that of your posterity, George W. Bush and his lackeys are committing you to commit a crime. We are on the hook for a bank bailout that could bankrupt us all.

Bush and company, along with Treasury Secretary Henry Paulson and Federal Reserve (a quasi-private bankers' oligopoly) chair Ben Bernanke, are creating a new institution to absorb the mistakes of the cabal of money, a new Resolution Trust Corporation (RTF) for stinky mortgages. They are bailing out mortgage derivative investors for possibly over a trillion dollars, with none of it so far going to help the troubled borrowers.

Hank Paulson is now the most powerful man in the world.

Economy

They are desperate. Paulson and Bernanke think that the administration MUST now succeed in curing a case of constipation in the banking “industry” in order to maintain restore the Republican administration and the Republican Party, thus boosting John McCain's chances of being elected. The mortgage derivatives are stuck. All confidence is gone. The cure for this “anal retention” cannot be a binding agent, regulation! That would actually be a remedy for the opposite malady.

Neither can the cure be to bleed the taxpayers – to require unselfish sacrifice of our fortune, adding to our debt. Furthermore, the dollar needs to be stronger. It masks the inflation. Inflation is simply put, too great a growth of the money supply. It shows up for most of us as price inflation, when the greater amount of purchasing power, money plus credit, has started chasing the always scare supply of goods. More money bids up the prices of everything. The stronger dollar staves off or masks the appearance of the problem. It allows importing at low prices. The strong dollar masks the coming price inflation that the banking bailout will cause, due to the massive creation of money that is involved.

How is the dollar made to appear stronger?

There are no markets anymore, just interventions.

See them buy dollars on the Forex (using the new currency swap agreements), beat down precious metals, boost the Dow and strengthen the Dollar!

Strange coincidence: just as gold was headed above 950 (March and July), the dollar started rising from below 72, reaching 85 recently, while gold plunged to year-ago level of 733.

 

Senator Jim Bunning said Treasury Secretary Henry Paulson, by rescuing Fannie Mae and Freddie Mac, is acting like China's finance minister and both Paulson and Federal Reserve Chairman Ben S. Bernanke should step down. “I sincerely believe that Henry Paulson and Ben Bernanke should resign,” said Bunning, a Republican from Kentucky on the Senate Banking Committee. “They have taken the free market out of the free market.” What do we get for dessert at our Socialist/Fascist “Lunch with Paulson” (SLP)? We get altruism, that certain excess of sweetness that kills.

Politics and the Economy

Then the two problems come together: first, we do cannot tell who our hero is that deserves our vote because both promote altruism.

Neither resembles those who founded our country, champions of individual rights and the free market where everyone worked hard for their own sake, with division of labor and trade to build up the welfare of all individuals. In hard times they voluntarily helped neighbors who had some bad luck. A welfare system was unthinkable and a central bank was at best, convenient, but not essential, and money was silver and gold by law (as it still should be, according to the constitution).

Instead, both espouse unselfish public service or altruism, and second, we have tried to run our economy with a fake money, the paper dollar from the Federal Reserve. This money is based on debt. Creating more money requires and is a by-product of government borrowing. Moreover, we have a fractional reserve system, under which banks can lend out at interest, nine times what they have in the till. Oh, but do not worry, they have insurance against the risk of all depositors demanding their money. Yeah, right! Moreover, when the “unthinkable” happens, the taxpayers are on the hook to save them.

As Dan Quayle said, "Bank failures are caused by depositors who don't deposit enough money to cover losses due to mismanagement."

John McCain has made “Country First” the theme of his presidential campaign. In response, Barack Obama declared, “I've got news for John McCain. We all put our country first.”

“I've got news for both candidates,” said Yaron Brook, executive director of the Ayn Rand Center for Individual Rights, “Both the left and the right have been ‘putting the country first' for decades--and that's the problem.

This is the kind of thing that happens when you have a non-objective morality coupled with a non-objective monetary system. We should neither stand idly by while the banks steal our country through the semi-private Federal Reserve, and the banks save themselves, who could not make it. Neither should we stand by while an alien morality conquers.

Let us put these canditate positions in the perspective of the founding documents:

The Declaration of Independence – governments are instituted to secure rights

The Preamble of the U.S. Constitution - secure the Blessings of Liberty

Amendment 9 and Amendment 10 – unlimited rights, but limited government

The Founders declared Individualism and Individual Rights as the starting point. Our candidates have replaced these with “country first” and “public service,” as if the division of labor and exchange of goods all of us do for a living are not the main driving power of our economy. No, rather than that basic principle of economics and politics, they want to set up redistribution as the main precept, redistribution of wealth either to the poor or to the wealthy.

If they persist in their madness we will soon have no economy, no life of our own.

We will have no Liberty and our own Happiness will be almost impossible to pursue. What kind of Life is that?