Editor’s Note: “Underground Nashville” covers artists, authors, musicians, poets, political figures, and other compelling people and happenings not typically covered by the mainstream Nashville media. It also presents reflections and commentary from an underground/indie perspective. As I told ‘The Tennessean’ in 2008, “since moving to Nashville twenty-five years ago, I have met people whose lives do not remotely reflect the caricature of what many outside our city presume to be a ‘Nashvillian’ or the Nashville experience.” “Underground Nashville” thus explores the soul of the city, not its surface—offering “thoughts from the shadows of a great American city.”
Dave Carew
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Middle Tennessee was devastated by flooding in May from which it will take months—in some cases, years—to recover. Please join the recovery effort by contacting Hands on Nashville at Hon.org or by calling (in Nashville) 211. Otherwise, please call 800-318-9355. You can also support The Salvation Army’s relief efforts by going to Salarmy-Nashville.org of calling 800-725-2769. Thank you.
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The U.S Economy: A Distinguished Professor of Finance Challenges the Conventional Wisdom
Interview with Deryl Martin, Ph.D.
by Dave Carew
Dr. Deryl Martin is Professor of Finance at Tennessee Technological University in Cookeville, Tennessee. Dr. Martin’s research has been published in dozens of journals and newspapers, including the Journal of Economics and Business, the Journal of Business Ethics, and the Journal of Financial and Strategic Decisions.
Dr. Martin—a passionate libertarian—has been active in free-market-based politics and philosophy since 1980, and served as economic advisor to Andre Marrou, the 1992 Libertarian Party candidate for president. He also is a past treasurer of the Libertarian National Committee, Inc.
Because Dr. Martin’s economic insights and perspective are so distinct from mainstream “conventional wisdom,” Underground Nashville was interested in asking him about his take on recent economic policies pursued by Presidents Bush and Obama. Here’s what Dr. Martin had to say:
UNDERGROUND NASHVILLE: The common wisdom is that TARP (the Troubled Assets Relief Program) bail-out by President Bush and the federal government was necessary in late 2008 “to prevent another Great Depression.” Why is this true or false? If it’s false, what policy should the federal government have enacted at that time instead?
DERYL MARTIN, PhD: Examined a different way, TARP spells TRAP! Believing that the Troubled Assets Relief Program was necessary is falling into the trap of thinking that politicians understand economics. Commerce necessarily involves ebb and flow. While some policies may postpone an economic downturn, it is equally true that when such measures are applied, the deferred downturns are more severe than they otherwise would be. Thus, the result of government’s intervention is to magnify the swings of the business cycle. Upswings lead to what Alan Greenspan called “irrational exuberance” and economic contractions turn into full-blown recessions. The solution is to take government out of the economy, period.
UN: Why do you believe President Obama’s economic stimulus package was the wrong policy? if you had been President of the United States in early 2009, what policy would you have proposed instead, and why?
DM: Like TARP, targeted programs like “Cash for Clunkers” and first-time home buyer credits are nothing but corporate welfare and wealth transfers designed to attract various constituencies and votes. Collectively, such stimuli are only band aids with temporary effect, as evidenced by the downturn in car and home sales when those programs ended. What is needed is for the law to consistently hold companies and individuals accountable for their actions and for government to otherwise stay out of the way. I would have reduced regulations and lowered taxes to give families more income to spend however they wished. Government needs to spend less money, not more.
UN: How do you answer critics of free-market economics who argue that it was the LACK of regulations (of Wall Street, of the mortgage industry, etc.) that resulted in “the Great Recession”?
DM: Who are these critics? They certainly aren’t economists! My guess is that they’re statists with a socialist agenda. The root cause of this recession is government itself. The free market didn’t ask for an increased role of Fannie Mae and Freddie Mac in the 1990’s. The free market didn’t promote the granting of mortgages to people unable to afford them. The free market didn’t have loose monetary policy to encourage economic growth. No, Congress and our other government institutions did those things under the Clinton administration, and Bush continued them. The Obama administration is just making matters worse.
David M. (Dave) Carew is editor of “Underground Nashville” and the author of the novels “Everything Means Nothing to Me: A Novel of Underground Nashville” and “Voice from the Gutter.” He also is a freelance book editor, publicist, and copywriter.
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