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Government Is the Systemic Risk


The Obama administration and congressional leaders assure us that the government can protect us from the “systemic risk” posed by big banks, insurance companies, and hedge funds.

But who will protect us from the government?

In light of all we’ve learned about the national government’s conduct in both domestic and foreign affairs over recent years, there is clearly no greater risk to American society than the government itself. Yet people look to it for security. That, I submit, is the fruit of propaganda and popular complacency. When can we expect the “eternal vigilance” that was supposed to keep us free?

One could go on at length about how the government — which includes the Great Counterfeiter, the Federal Reserve — threw the economy into turmoil with the housing boom and subsequent bust. Blame, as the politicians will, “Wall Street,” the fact remains that none of the firms there could have engaged in such systemically risky behavior without the partnership of the government. When Congress and the White House push and facilitate the guarantee of bad mortgage loans on a wide scale, while the Fed provides at least some of the money and a safety net to banks that get into trouble, you have the makings of a disaster that could never have occurred in a free market. Those who blame greed and deregulation have willfully blinded themselves for ideological reasons. The facts are plain for all who are curious.

Of course, it is not only in domestic financial matters that the government endangers us. Foreign affairs also are a source of risk. Long-running and various brutal U.S. interventions in the Middle East have filled people with enough hate that some were willing to fly airplanes into buildings in New York. Since then America’s misrepresentatives have made things far worse through invasions, bombings, occupations, open-ended detentions, and torture. Through it all, government officials have lied to the American people about was happening. Lied: about (nonexistent) Iraqi weapons, about (nonexistent) ties between Iraq and al-Qaeda, about torture, about the need for the “enhanced interrogation” that they denied was torture. They lied about everything — to the people in whose name they acted.

The enormity of these crimes cannot be exaggerated. Not only did the perpetrators betray the people they claimed to “serve,” they endangered the people by creating more reasons for others to hate them. Obama’s disinclination to prosecute those who made and carried out the torture policy is a shameful demonstration that, when it really matters, genuine change is an illusion. And since there will be no consequences for official criminal conduct, we can be sure it will take place again. That’s what happens when our rulers and their henchmen are above the law.

Where is the change? Obama’s policy in Pakistan has spread U.S. murder to yet another country. Meanwhile, he beefs up the war in Afghanistan, where, among other outrageous things, the U.S. and Afghan governments destroy Afghan farmers’ poppy crop. The results of this abominable action are predictable. They create resentment in the farmers toward the United States, while creating sympathy for anyone who offers assistance. Meanwhile the Taliban finances its resistance to occupation through the drug trade.

By what right does an American president destroy a crop in a foreign nation? Because some Americans use the heroin that is made from those poppies? Because profits from the crop support the Taliban? Neither reason makes sense. No one uses heroin because Afghans grow poppies. People use it because they want it, and if they can’t get Afghan-based heroin, they’ll get some other kind. They should be free to use whatever substance they want in peace. There certainly is no justification for blaming the poor farmers of Afghanistan.

As for the profits financing the resistance, there wouldn’t be abnormal profits in drug-related activities if the U.S. government would drop its inhumane war on drug producers and consumers, which serves only to empower the state to invade our liberties and to create violent black-market gangs. And there wouldn’t be an occupation to resist if the U.S. left Afghanistan.

In so many ways, we’d be much safer if the government stopped protecting us.

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    Sheldon Richman is former vice president and editor at The Future of Freedom Foundation and editor of FFF's monthly journal, Future of Freedom. For 15 years he was editor of The Freeman, published by the Foundation for Economic Education in Irvington, New York. He is the author of FFF's award-winning book Separating School & State: How to Liberate America's Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and Tethered Citizens: Time to Repeal the Welfare State. Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: "I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank... . I also think that Mr. Richman is right to fear that state education undermines personal responsibility..." Sheldon's articles on economic policy, education, civil liberties, American history, foreign policy, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, The American Conservative, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the The Concise Encyclopedia of Economics. A former newspaper reporter and senior editor at the Cato Institute and the Institute for Humane Studies, Sheldon is a graduate of Temple University in Philadelphia. He blogs at Free Association. Send him e-mail.