Following Wednesday's 280 point drop in the Dow, the headline of a CNBC article read "Wall Street Baffled by Slowing Economy, Low Yields." MBAs, financial analysts, seasoned stock traders, money managers, investment bankers, et al. are baffled? Really

They, and our present crop of politicians (and Republican presidential candidates) would benefit from reading and heeding the wisdom of Henry Hazlitt (1894-1993), noted economist, author, columnist, and philosopher. At an address in 1962 before the Mont Pelerin Society in Belgium, titled "Planning vs. the Free Market", and later published in The Freeman, Hazlitt said:

The way to get a maximum rate of "economic growth"...is to give maximum encouragement to production, employment, saving, and investment. And the way to do this is to maintain a free market and a sound currency. It is to encourage profits, which must in turn encourage both investment and employment. It is to refrain from oppressive taxation that siphons away the funds that would otherwise be available for investment. It is to allow free wage rates that permit and encourage full employment. It is to allow free interest rates, which would tend to maximize saving and investment.

The way to slow down the rate of economic growth is, of course, precisely the opposite of this. It is to discourage production, employment, saving, and investment by incessant interventions, controls, threats, and harassment. It is to frown upon profits, to declare that they are excessive, to file constant antitrust suits, to control prices by law or by threats, to levy confiscatory taxes that discourage new investment and siphon off the funds that make investment possible, to hold down interest rates artificially to the point where real saving is discouraged and malinvestment encouraged, to deprive employers of genuine freedom of bargaining, to grant excessive immunities and privileges to labor unions so that their demands are chronically excessive and chronically threaten unemployment--and then to try to offset all these policies by government spending, deficits, and monetary inflation...

[Statists'] recipe for inducing growth always turns out to be--inflation. This does lead to the illusion of growth, which is measured in their statistics in monetary terms. [But]...the magic of inflation is always a short-run magic, and quickly played out...The consequences of this short-lived paradise are malinvestment, waste, a wanton redistribution of wealth and income, the growth of speculation and gambling, immorality and corruption, social resentment, discontent and upheaval, disillusion, bankruptcy, increased governmental controls, and eventual collapse. This year's euphoria becomes next year's hangover. Sound long-run growth is always retarded.

Wall Street, the cause of our predicament is no mystery. There's nothing new under the sun. But big-government types and crony capitalists who feed off of unlimited government have done an effective job of confusing and squelching these basic economic truths and sabotaging free enterprise while promoting statism and tyranny, pushing us closer to collapse.

As Mr. Hazlitt wrote, to attack free enterprise as the statists have and do is to attack "economic freedom--which means, in fact, the whole of human freedom." What is threatened by the interventionists, the schemers, the centralized planners, the socialists "is no less than our present civilization itself."