Economics professor Bernard Malamud not once but twice invited the crowd in Las Vegas to visit nearby Hoover Dam to see for themselves an example of the productive assets that were created by Franklin Delano Roosevelt’s (FDR) New Deal. Professor Malamud was recruited to plead the Keynesian side of the argument in an “FDR’s Depression Policies: Good Deal or Raw Deal?” debate with the Foundation for Economic Education’s (FEE) Lawrence Reed during FreedomFest.

I finished my masters degree from UNLV under the tutelage of Murray Rothbard but I started my coursework with a class or two from professor Malamud, who, while being as Keynesian as they come, is at least sympathetic to the Austrian view when it comes to explaining speculative bubbles. He certainly took on Mr. Reed with good humor in front of an unfriendly, anti-FDR audience.

Malamud’s thesis is that no matter what your ideology, New Deal economics worked! The economy was in the midst of a terrifying deflation spiral. Treasury Secretary Andrew Mellon was saying things like “Liquidate labor, liquidate stocks, liquidate farmers.” The money supply was dropping, strangled by a rigid gold standard. The private sector was not eager to invest, so an alphabet soup of federal programs — like the CCC, CWA, WPA, FDIC, SEC, FSLIC — had to fill the void, putting people back to work, stimulating aggregate demand and providing for FDR’s four freedoms: freedom of speech, freedom of belief, freedom from want, and freedom from fear. At the same time, FDR’s “playing with the price of gold” as Malamud put it, loosened up the money markets.

Recovery (or reinflation) started as soon as 1933 and was only sidetracked in 1937, when the stimulus was pulled back. The “mistake of 1937″ was made, according to the UNLV professor, when FDR’s administration went back to listening to Andrew Mellon and instituted the austerity programs FDR had promised during his initial campaign.

When his turn came for rebuttal, Reed joked that he “felt like a mosquito at a nudist camp; I know what I need to do, but I don’t know where to begin.” After his free-market case was made and the Keynesian case was destroyed, Reed quipped, “The economy recovered when FDR didn’t.”

Keynesians erect a pretty low bar when judging the productivity of government stimulus projects, but the results of the concrete monster known as Hoover Dam have been devastating. Hoover described the dam as “the greatest engineering work of its character attempted by the hand of man.” The massive structure cost $49 million (or $736 million in inflation-adjusted dollars) and measures over 726 feet in height and more than 1,200 feet in length. It took five years and 4,360,000 cubic yards of concrete to build, and was finished two years ahead of schedule. About 16,000 people worked on constructing the dam, with over 100 losing their lives in the process.

Just as the Keynesian policies of the New Deal tried to cheat the laws of economics, government’s damming of the Colorado River attempted to cheat Mother Nature by bringing water to the desert southwest — water that just isn’t and never was there. The great western explorer John Wesley Powell was booed out of the room when he told the irrigation congress, “Gentlemen, you are piling up a heritage of conflict and litigation over water rights, for there is not sufficient water to supply the land.”

But 75 years ago, when the dam was nearly completed, FDR proclaimed during his dedication speech that millions of present and future residents of the southwest could count on “a just, safe, and permanent system of water rights.” The turbulent Colorado River that vacillated between droughts and floods would be tamed and become “a great national possession” and be counted on for irrigation to support a human migration seeking mild winters and new opportunities.

“The nation took him at his word,” writes Michael Hiltzik, author of Colossus: Hoover Dam and the Making of the American Century. “Since that dedication year, the population of the seven states of the basin has swelled by about 45 million. Much of this growth has been fueled by the dam and its precious bounties of water and electrical power.”

As Hiltzik points out, the dam’s water promise gunned the growth of southern California cities and attracted farmers to the west to grow water-intensive crops like cotton despite the lack of normal rainfall required to support this kind of agriculture.

Just as government stimulus programs and artificially low interest rates that promise to spur growth and make up for the lack of private investment never work, Hoover’s promise that his dam would, as Hiltzik writes, “provide all the water their states could conceivably need to fulfill their dreams of irrigation, industrial development and urban growth” is literally drying up. The water level at Lake Mead is down 120 feet from its high-water mark, revealing a white “bathtub ring.”

Now that millions have migrated to the southwest and private industry has invested millions of dollars, Hoover and FDR’s promises have confined those living and doing business in the west “in the straitjacket of an ever-intensifying water shortage,” notes Hiltzik. And while Interior Secretary Gale Norton claimed to have stilled the “conflict on the river” back in 2003 with the signing of two-dozen agreements transferring water rights between various Indian tribes, cities, and governments, the battle for water will rage on. The supply will never catch up with the demand.

After the ten-year drought, another $700 million is now being spent to install an additional intake pipeline into the diminishing Lake Mead. Almost 90 percent of the drinking water for Las Vegas comes from the lake. The new intake pipeline, officially known as Intake No. 3, “will reach deeper into the reservoir to protect the valley’s water supply should the lake shrink low enough to shut down one of the two shallower straws,” reports the Las Vegas Review-Journal.

However, the cost of this project is likely to rise, because the tunnel being excavated for the pipeline unexpectedly filled with water earlier this month. But this cost overrun shouldn’t trouble Keynesians, because the additional taxpayer money just provides more stimulus, right?

Those in government never learn. They can’t print prosperity, and more water won’t magically appear if they dam a river. While the man on the street believes government infallible, politicians and bureaucrats cannot calculate the economic profits and losses of government interventions. Ludwig von Mises made the point that government interventions inevitably lead to unintended consequences, leading government to constantly intervene further. So governments will fight over scarce water, and private use is increasingly being restricted by local ordinances.

The New Deal dam project that professor Malamud is so proud of provided a few thousand jobs 80 years ago, but has spurred migration, farming, and development that is likely unsustainable and may ultimately be the biggest malinvestment in history.

http://www.campaignforliberty.com/article.php?view=1024

1. The word “gold” comes from the Old English word “geolu,” meaning yellow.

2. There is more steel created per hour than there has been gold dug up throughout history.

3. Around 161,000 tons of gold have been mined by humans.

4. Gold can be found beneath the earth on all seven continents.

5. It is believed that around 80% of earth’s gold is still buried underground.

6. There is an estimated total of 10 billion tons of gold in the world’s oceans. That is 25 tons of gold for every cubic mile of seawater.

7. The world’s first gold vending machine was unveiled in May 2010. Located in an ultra-luxury hotel in Abu Dhabi, the vending machine itself is covered in 24-carat gold.

8. At the time of writing, the price of gold was $1,220.80 per ounce.

9. Most western economies’ currencies were on the gold standard until 1961.

10. Switzerland was the last country whose currency was tied to gold. 40% of a Swiss Franc was backed by gold until Switzerland joined the IMF in 1999.

11. The gold held at Fort Knox is accounted for by the United States as an asset valued at $44.22 per ounce.

12. As of December 31, 1941 Fort Knox held 649.6 million ounces of gold.

13. Today, Fort Knox holds about 147.3 million ounces.

14. The size of a standard gold bar is 7″ by 3 and 5/8″ by 1 and 3/4″

15. Alchemists believe they can change ordinary materials, such as lead, into gold.

16. A carat was originally a unit of mass based on the carob seed used by ancient merchants.

17. The most expensive gold coin in the world is the 1933 Double Eagle, which was sold at Sotheby’s in New York in 2002 for $7.59 million.

18. Elvis Presley owned three cars manufactured by Stutz Motor Company, in which every part that is normally chrome was converted to gold.

19. Former Tyco International CEO Dennis Kozlowski bought a gold-threaded shower curtain worth $6,000.

20. A noble metal, gold is prone neither to rust nor tarnish and does not form an oxide film on its surface when coming into contact with air.

21. There are 92 naturally occurring elements found in the earth’s crust. Gold ranks 58th in rarity.

22. The chemical symbol for gold is Au, which is derived from the Latin word “aurum,” which means “shining dawn.”

23. Absolutely pure gold is so soft that it can be molded with the hands.

24. The melting point of gold is 2,063 degrees Fahrenheit.

25. Gold is a great conductor of electricity.

26. Gold is the most malleable and ductile pure metal known to man.

27. An ounce of gold can be beaten into a sheet covering 100 square feet.

28. In 1869, two Australians unearthed the world’s largest nugget of gold, the “Welcome Stranger,” which measured 10 by 25 inches before it was melted down.

29. The largest nugget still in existence is the “Hand of Faith,” found in 1980 in Australia. It is currently on display at the Golden Nugget Casino in Las Vegas.

30. A gold nugget found in the earth can be three to four times as valuable as the gold it contains because of its rareness.

31. The heaviest modern gold bullion coin is the Australian Kangaroo, weighing in at 32.15 ounces.

32. Pure gold does not cause skin irritations.

33. Some sufferers of rheumatoid arthritis receive injections of liquid gold to relieve pain.

34. Olympic gold medals were pure gold until 1912.

35. An ounce of gold can be drawn into a wire 60 miles long.

36. Two thirds of the world’s gold comes from South Africa.  37. India is the world’s largest consumer of gold today.

38. South Asian jewelry is generally more pure than western jewelry, comprised of 22 carat gold rather than 14 carat.

39. Gold is the state mineral of California and Alaska.

40. 90% of the world’s gold mining has been done since the discovery of gold at Sutter’s Mill in California in 1848.

41. During the California gold rush, some speculators paid more for an ounce of water than they received for an ounce of gold.

42. South Dakota and Nevada produce more gold than any other states.

43. Scientists believe that gold can be found on Mars, Mercury, and Venus.

44. The visors of astronauts’ helmets are coated in a very thin, transparent layer of gold (.000002 inches) that reduces glare and heat from sunlight.

45. The Aztec word for gold, “teocuitatl,” was translated by Europeans as meaning “excrement of the gods.”

46. According to the legend of El Dorado (the gilded one), an Andean chief who was covered in gold dust would make offerings of gold into a mountain lake.

47. Evidence suggests that around 5,000 B.C., gold and copper became the first metals to be discovered by man.

48. King Croesus of Lydia created the first pure gold coins in 540 B.C.

49. When Franklin Roosevelt raised the price of gold from $20.67 to $35 in 1934, the dollar immediately lost 40% of its value.

50. Henry VIII, Diocletian and Nero were infamous gold debasers, mixing other metals into gold coins and decreasing their value.

Senator Joe Lieberman, co-author of a bill that would give President Obama a ‘kill switch’ to shut down parts of the Internet, attempted to reassure CNN viewers yesterday that concerns about the government regulating free speech on the web were overblown, but he only stoked more alarm by citing China, a country that censors all online dissent against the state, as the model to which American should compare itself.

During an appearance on CNN’s State of the Union with Candy Crowley, Lieberman characterized concerns that his 197-page Protecting Cyberspace as a National Asset Act (PDF) legislation represents an attempt to hand Obama “absolute power” over the Internet as “total misinformation,” adding that people were “intentionally peddling misinformation”.

Lieberman again invoked “cybersecurity” as the motivation behind the bill and tried to assuage the worries of critics. “So I say to my friends on the Internet, relax. Take a look at the bill. And this is something that we need to protect our country,” said the Senator.

However, Lieberman’s choice of comparison in justifying the necessity of the bill will only serve to heighten concerns that the government is going after free speech.

“Right now China, the government, can disconnect parts of its Internet in case of war and we need to have that here too,” said Lieberman.

The Senator’s reference to China is a telling revelation of what the cybersecurity agenda is really all about. China’s vice-like grip over its Internet systems has very little to do with “war” and everything to do with silencing all dissent against the state.

http://www.infowars.com/lieberman-china-can-shut-down-the-internet-why-cant-we/

Former Clinton and Obama budget adviser Franklin Raines owns a key carbon-emissions patent he developed as CEO of the government-sponsored mortgage giant Fannie Mae, positioning him and his partners to make millions of dollars if it is used in any carbon-capping scheme implemented by the Obama administration.

Raines and his associates led Fannie Mae and Congress to believe Fannie Mae owned the patent, despite public records to the contrary, a WND investigation has found.

Raines and his partners carried out their plan by quietly filing for and receiving a second nearly identical carbon-emissions patent that superseded the first patent, according to government records. The second patent was never assigned to Fannie Mae or any other party.

As WND reported, an Enron-like accounting scandal enabled Raines to earn $90 million in his five years as Fannie Mae CEO, from 1999 to 2004.

Raines and his associates applied for the first patent, U.S. Patent No. 6904336, entitled “System and Method for Residential Emissions Trading,” Nov. 8, 2002, while Raines was Fannie Mae CEO. The first patent was issued June 7, 2005.

http://www.wnd.com/index.php?fa=PAGE.view&pageId=168077

The EU will increase the pressure on Iran on Thursday by unveiling more sanctions, including banning investment in the country’s key energy sector.

The measures will also include blacklisting and freezing the assets of members of the elite Iranian Revolutionary Guard Corps.

A draft declaration on Iran, obtained by the Guardian and to be agreed by European government chiefs at a Brussels summit, states that “new restrictive measures have become inevitable” because of Tehran’s suspect nuclear programme and its refusal to negotiate over it.

In what is a long-running standoff, the UN security council agreed a fourth round of sanctions against Iran last week.

http://www.guardian.co.uk/world/2010/jun/15/eu-sanctions-iran-nuclear-programme

You’ve got to hand it to the people who really dislike free markets. They see them everywhere (under every bed?) and especially wherever any serious problem arises. That no free market exists within a thousand miles makes no difference whatsoever.

Take the oil spill in the Gulf. Market opponents are having a field day. They say this finally demonstrates the need for government to run things. Private firms can’t be trusted.

But it looks more like government can’t be trusted. The central government is, in law and in fact, the owner of the part in the Gulf where BP drilled for oil. (I didn’t say it was the legitimate owner.) The owner leased its property to a private company, BP, with a bad safety record (though a good one for sucking up to the environmentalist establishment and bureaucrats) and issued permits for the drilling operation. It then failed to keep a sharp eye on what BP and subcontractors Transocean and Halliburton were doing to its property. That might have something to do with the fact that government regulators don’t have the sort of relationship to “their” property that real private owners do, and they can always be counted on to get friendly with those they regulate. The Minerals Management Service in the Interior Department has a special conflict of interest: It makes money off the drilling it permits and regulates. Thus it could benefit from decisions that are bad for the public.

So what failed here, the market or the State? The call isn’t even close. The free market was nowhere near the scene. It has an airtight alibi. It didn’t exist.

Now with some effort you might get a die-hard anti-market person to concede this. So we move to the next step. What should replace the current hybrid (government-corporate) system? I see only two choices: full government management or full market management. Full government management wouldn’t appear terribly promising, considering that the current problems are traceable back to government management already. How would things change substantially if, instead of contracting out the drilling to a nominally private company, the government instead hired the personnel itself and paid them directly from the U.S. Treasury? Who cares if the rig says “BP, ” “Transocean,” or “U.S. Government” on it? The same fallible people would be in the same position to make the same fateful mistakes. Not much would have changed.

Incentives Matter

That’s because what matters is incentives, not whether a worker is on the government payroll. Why assume that civil service employees know more or care more than people paid by corporations?

But, it will be said, the government workers will have a mandate to protect the environment and the public. Okay, let’s go with that. Let’s say the decision-makers are environmental hawks who really don’t like oil drilling anywhere. They’ll be tough: no drilling unless it’s 100 percent safe. Leaving aside the obvious problem with this standard, that policy would have costs. The risk of oil spills may drop to zero, but we might have to forgo certain important benefits in the process. Poor people, say, might have their prospects dimmed by more expensive energy.

Is the tradeoff worth it? How do we go about answering that question? Government is no help here. It can certainly impose a plan, but constructing a plan beneficial to the public would be like playing darts in the dark. What bureaucrats think is good for us may not actually be good for us, no matter how much they care. Mises and Hayek covered this in their writings on state socialism and economic calculation.

Things are sure looking bleak. Government assurances are worthless whether it contracts out for drilling or does it itself. That leaves only the free market. Can it be trusted?

First off, let’s remember that we live in the real world. There are no iron-clad guarantees. The best we can hope for is relative security. Option A can’t be perfect. All we can ask is that it is better than Options B, C, and D. But how do we decide? When people conclude that government management is the best alternative, knowingly or not they have rigged the game. They are comparing the messy real world in which free markets would operate to an impossible government-managed smooth-running utopia, where regulators have complete knowledge and total dedication to the public interest. This is the Nirvana Fallacy, and the problem with it is that utopia isn’t on the table.

What is on the table are two options: an arrangement where incentives align economic activity with the public interest and one where they don’t. Now which setup seems more promising? One where personnel risk no capital, face no prospects of bankruptcy, and procure their revenue by force (taxation) after flattering members of special-interest-serving congressmen? Or one where: capital had to be raised from wary investors in a competitive environment, insurance would be priced according to risk, products would have to be sold to buyers who are free to say no, and full and strict liability would haunt every decision, with bankruptcy always looming and no government bailout are even implied?

When you come down to it, the choice is really rather easy.

http://www.campaignforliberty.com/article.php?view=931

“Kill the speculators!” is a cry made during every famine that has ever existed. Uttered by demagogues, who think that the speculator causes death through starvation by raising food prices, this cry is fervently supported by the masses of economic illiterates. This kind of thinking, or rather nonthinking, has allowed dictators to impose even the death penalty for traders in food who charge high prices during famines. And this is done without the feeblest of protests from those usually concerned with civil rights and liberties.

Yet the truth of the matter is that, far from causing starvation and famines, it is the speculator who prevents them. And far from safeguarding the lives of the people, it is the dictator who must bear the prime responsibility for causing the famine in the first place. Thus, the popular hatred for the speculator is as great a perversion of justice as can be imagined. We can best see this by realizing that the speculator is a person who buys and sells commodities in the hope of making a profit. He is the one who, in the time-honored phrase, tries to “buy low and sell high.”

But, what does buying low, selling high, and making large profits have to do with saving people from starvation? Adam Smith explained it best with the doctrine of “the invisible hand.” According to this doctrine, “every individual endeavors to employ his capital so that its produce may be of the greatest value. He generally neither intends to promote the public interest, nor knows how much he is promoting it. And he intends only his own security, his own gain. He is led in this as if by an invisible hand to promote an end that was no part of his intention. By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it.”[i]

The successful speculator, therefore, acting in his own selfish interest, neither knowing nor caring about the public good, promotes it.

First, the speculator lessens the effects of famine by storing food in times of plenty, through a motive of personal profit. He buys and stores food against the day when it might be scarce, enabling him to sell at a higher price. The consequences of his activity are far-reaching. They act as a signal to other people in the society, who are encouraged by the speculator’s activity to do likewise. Consumers are encouraged to eat less and save more, importers to import more, farmers to improve their crop yields, builders to erect more storage facilities, and merchants to store more food. Thus, fulfilling the doctrine of the “invisible hand,” the speculator, by his profit-seeking activity, causes more food to be stored during years of plenty than otherwise would have been the case, thereby lessening the effects of the lean years to come.

However, objections will be raised that these good consequences will follow only if the speculator is correct in his assessment of future conditions. What if he is wrong? What if he predicts years of plenty – and by selling, encourages others to do likewise – and lean years follow? In this case, wouldn’t he be responsible for increasing the severity of the famine?

Yes. If the speculator is wrong, he would be responsible for a great deal of harm. But there are powerful forces at work that tend to eliminate incompetent speculators. Thus, the danger they represent and the harm they do are more theoretical than real. The speculator who guesses wrong will suffer severe financial losses. Buying high and selling low may misdirect the economy, but it surely creates havoc with the speculator’s pocketbook.

A speculator cannot be expected to have a perfect record of prediction, but if the speculator guesses wrong more often than right, he will tend to lose his stock of capital. Thus he will not remain in a position where he can increase the severity of famines by his errors. The same activity that harms the public automatically harms the speculator, and so prevents him from continuing such activities. Thus at any given time, existing speculators are likely to be very efficient indeed, and therefore beneficial to the economy.

Contrast this with the activity of governmental agencies when they assume the speculator’s task of stabilizing the food market. They too try to steer a fine line between storing up too little food and storing up too much. But if they are in error, there is no weeding-out process. The salary of a government employee does not rise and fall with the success of his speculative ventures. Since it is not his own money that will be gained or lost, the care with which bureaucrats can be expected to attend to their speculations leaves much to be desired. There is no automatic, ongoing daily improvement in the accuracy of bureaucrats, as there is for private speculators.

The oft-quoted objection remains that the speculator causes food prices to rise. If his activity is carefully studied, however, it will be seen that the total effect is rather the stabilization of prices.

In times of plenty, when food prices are unusually low, the speculator buys. He takes some of the food off the market, thus causing prices to rise. In the lean years that follow, this stored food goes on the market, thus causing prices to fall. Of course, food will be costly during a famine, and the speculator will sell it for more than his original purchase price. But food will not be as costly as it would have been without his activity. (It should be remembered that the speculator does not cause food shortages; they are usually the result of crop failures and other natural or man-made disasters.)

The effect of the speculator on food prices is to level them off. In times of plenty, when food prices are low, the speculator by buying up and storing food causes them to rise. In times of famine, when food prices are high, the speculator sells off and causes prices to fall. The effect on him is to earn profits. This is not villainous; on the contrary, the speculator performs a valuable service.

Yet instead of honoring the speculator, demagogues and their followers revile him. But prohibiting food speculation has the same effect on society as preventing squirrels from storing up nuts for winter – it leads to starvation.

http://www.lewrockwell.com/block/block160.html

When reading Grapes of Wrath by John Steinbeck, one is painted a picture of corporate abuses over helpless people who are finally saved after years of struggle by the government. Steinbeck blames banks and the invention of the tractor and other machinery for displacing thousands of “Okies” who were no longer needed to attend to the crops. He also describes a scene where the California farmers destroyed their oranges and other goods in front of the starving people because no one had the money to buy the products. I will do my best to address these points and explore the reality of the economy during the Great Depression.

Contrary to popular belief, the problem in the eyes of government and corporations was not high prices, it was low prices. Corporations blamed low prices on evils such as “unfair competition” and claimed their “profits weren’t protected.” In response to these complaints, Franklin Roosevelt started the first of many “New Deal” government interventions by creating the National Recovery Administration (NRA) in 1933. The first administrator of the agency, Hugh Johnson, called it “the greatest social advance since the days of Jesus Christ.”

The NRA essentially centralized businesses and industries into regulatory cartels. Large businesses suddenly had the power of law to declare “codes of fair competition” and eliminate “destructive competition.” This led to the formulation of price floors and minimum wage laws, meaning that if a business offered a lower wage to employees or lower price to consumers than the industry’s standards they would be fined and/or imprisoned. A famous example is that of Jacob Maged, a New Jersey tailor who charged 35 cents for pressing a suit, 5 cents below the 40 cent minimum established by the NRA. Only when he agreed to follow the NRA standards did he avoid a $100 fine and a 30 day jail sentence.

Such a law diminishes creativity in start-up businesses, provides a de facto monopoly to the larger players in an industry, and establishes what large businesses consider “fair competition”: no competition. Without free competition and fluctuation of prices and wages, the individual people are inevitably the ones who are most impacted in a negative way. Mandatory higher wages destroy jobs for lower-skilled workers, and mandatory higher prices obviously prevent people from buying goods they especially need during a depression. In other words, the NRA was preventing the market from readjusting its labor and goods to the productive areas of the economy in the name of “fair competition” and other terms created by businessmen looking to use government to protect their profits.

The NRA was just the beginning of the attack on low prices. Many farm goods such as wheat and cotton were experiencing large drops in prices as the recession and depression worsened. Government believed the problem was overproduction, which they then believed led to prices that were too low, putting a strain on businesses. It is worth noting that the economists who actually predicted the Great Depression strongly recommended against the policies pushed through by the Roosevelt Administration.

In an attempt to “stabilize” farms and food prices, the Agriculture Adjustment Act was passed in 1933. The basic goal of the newly formed Agriculture Adjustment Administration (AAA) was to pay farmers to reduce their crop area and output. This, the AAA and Roosevelt Administration believed, would bring stability to the economy by raising prices to their so-called appropriate level. Oklahoma is the initial setting of the Joad family in Grapes of Wrath, so we’ll stick with Oklahoma figures for now.

In Oklahoma in 1933, 87,794 cotton farmers plowed under acres of their already-growing fields for a total payment of $15,792,287 from the federal government.

In 1934, Oklahoma pig farmers received more than $4 million to slaughter a portion of their sows and younger pigs.

In 1934 and 1935 wheat farmers were paid nearly $14 million to reduce their acreage. What’s ironic is just years earlier in 1917, under the watch of Herbert Hoover at the Food Administration, the government paid farmers an artificially high $2-per-bushel of wheat to expand the production of wheat for the efforts of World War 1. First government subsidized the unnatural growth of wheat (causing a major wheat bubble and artificial reallocation of farmers’ resources in the Midwest), and less than 20 years later government was paying farmers to stay away from wheat and do absolutely no farming on their land.

In the entire U.S., production of other products like milk and butter decreased approximately 30% thanks to the new federal subsidies.

It was this process that played the single greatest role in landowners getting rid of their tenants in Oklahoma, not some far off mysterious bankers as Steinbeck portrays in Grapes of Wrath. Another major factor was that the federal subsidies did not reach the smaller family farms in Oklahoma, which provided a double-whammy to the small farms with the artificially higher prices that came with the food destruction. Basically, large farms were paid to do nothing and even destroy their crops, which increased prices and diminished competition artificially, which in turn led to the eventual decline of small farms (who were often bought by the larger subsidized farms) as well as the removal of many tenants of the larger farms.

These fatally flawed policies monopolized large farms and forced many farmers to leave the state, most choosing to go to California and the Southwest. Steinbeck places the majority of the blame on corporations, but he failed to see that the corporations would have been powerless without the force of government. Both the NRA and AAA were ruled unconstitutional by the Supreme Court in 1936, but many similar policies have remained in place up to the present day.

Basic economic common sense tells us that you cannot create wealth by destroying wealth. If this were the case you’d have Apple destroying most of its iPods, Chipotle would demolish its burritos, and more businessmen would probably be following this practice. However, it is plain common sense that assures and convinces us that you cannot expand your wealth by voluntarily destroying your goods. This is what Steinbeck blames California farmers for doing, but there is no historical evidence that suggests farmers sprayed kerosene on their oranges and dumped their potatoes in the rivers. The only examples of farmers destroying their crops are those who were paid to do so by the federal government.

A question is worth asking: if, as Steinbeck wrote, farmers did destroy their oranges and potatoes because no one could afford to purchase them, why not sell them for even 1/2 cent a piece? The loss would be far less than actually paying people to harvest the goods, only then to proceed to physically destroy them all. Such a bogus event would not benefit the farmer, the workers, or the consumers. The farmers would be better off not growing those crops at all or simply giving them away, rather than expending even more resources on hiring guards and people to destroy the food.

John Steinbeck is a fantastic writer but, as with many writers, he has a flawed or incomplete view of the real economic world. People are not helpless peons when given the ability to make their own choices, start their own businesses, and live their lives as they see best. The attempt at a planned economy during the Great Depression did not reduce unemployment or diminish the impacts of the economic correction as expected or hoped. It is a prime example and vital reminder of the destruction that is bound to occur when a select few are empowered to control, manipulate, and implant their vision of a perfect society on the rest of the people.

Ontario, Canada’s most populous province, kicked off a fierce battle with drug companies and pharmacies when it said earlier this year it would halve generic drug prices and eliminate “incentive fees” to generic drug manufacturers.

British Columbia is replacing block grants to hospitals with fee-for-procedure payments and Quebec has a new flat health tax and a proposal for payments on each medical visit — an idea that critics say is an illegal user fee.

And a few provinces are also experimenting with private funding for procedures such as hip, knee and cataract surgery.

It’s likely just a start as the provinces, responsible for delivering healthcare, cope with the demands of a retiring baby-boom generation. Official figures show that senior citizens will make up 25 percent of the population by 2036.

“There’s got to be some change to the status quo whether it happens in three years or 10 years,” said Derek Burleton, senior economist at Toronto-Dominion Bank.

“We can’t continually see health spending growing above and beyond the growth rate in the economy because, at some point, it means crowding out of all the other government services.

“At some stage we’re going to hit a breaking point.”

http://www.reuters.com/article/idUSTRE64U3XO20100531