Economics

29
Sep
By Bob Weeks

Wall Street Crisis Fruit of Government, Not Free Markets

Radley Balko writing about the activities of the United States Government in Reason Magazine: Many commenters have blamed all of this on capitalism. This isn't capitalism. It's a peculiar kind of corporatist socialism, where good risks and the resulting profits remain private, but bad risks and the resulting losses are passed on to taxpayers. There's nothing free-market about it. Also: Bailout plan splits free-market backers
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28
Sep
By Bob Weeks

Bailout Raises Libertarians’ Market Value

"The specter of the most titanic intervention in the markets since Franklin Roosevelt started sewing the safety net has folks at the Cato Institute reaching for something strong." See Bailout Raises Libertarians' Market Value in the Washington Post. Also from the Cato Institute: Because of their quasi-governmental status, there is a market perception that Fannie Mae and Freddie Mac mortgage-backed securities and debt carry an implicit federal guarantee against default. Hence, the GSEs expose the federal taxpayer to an ever-increasing potential contingent liability that could ultimately cost tens of billions of dollars to rectify. When was this written? A week…
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26
Sep
By Bob Weeks

The Bailout Reader

The Ludwig von Mises Institute has compiled The Bailout Reader, a collection of articles relevant to the current situation. Not all these articles are from the past few weeks, as Austrian economists have long understood the dangers of government interventionism, the fruits of which we see today. The events taking place in the financial market offer an illustration of the soundness of the Austrian theory of money, banking, and credit cycles, and Mises.org is your source not only for analysis of these events but also the economic theory that helps explain what is happening and what to do about it.…
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26
Sep
By Bob Weeks

Ron Paul’s Wisdom on the Current Financial Crisis

Ron Paul writes My Answer to the President, noting that the "financial meltdown the economists of the Austrian School predicted has arrived." He introduces a quotation from Hayek this way: F.A. Hayek won the Nobel Prize for showing how central banks’ manipulation of interest rates creates the boom-bust cycle with which we are sadly familiar. In 1932, in the depths of the Great Depression, he described the foolish policies being pursued in his day -- and which are being proposed, just as destructively, in our own. In my opinion, a great danger we face is that just as the Great…
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19
Sep
By Bob Weeks

Laissez faire in Washington? On what planet?

Sheldon Richman of the Foundation for Economic Education contributes analysis of the current economic situation in the article Government Failure. A few quotes: Laissez faire in Washington? On what planet? Governments at all levels have regulated the financial industry from the time of the founding. ... At the Division of Labour blog, economist Lawrence H. White asks: “What deregulation have we had in the last decade? Please tell me." ... What about greed? Here White also has something important to say: “If an unusually large number of airplanes crash during a given week, do you blame gravity? No. Greed, like…
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13
Jul
By Bob Weeks

Drug Runaround: Solved by Universal Health Care?

A letter writer in the July 12, 2008 Wichita Eagle has issues with his health insurance coverage, and wants us to discard our present system in favor of universal health care coverage. Mr. Ronald Voth of Halstead (a candidate for the Democratic party nomination for the U.S. House of Representatives for the fourth district of Kansas in 2006) criticizes the health insurance company he uses. He doesn't say how he obtained this coverage, but if he's like most Americans that don't receive their health care from the government, he and his family probably have an insurance policy selected and paid…
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13
Jul
By Bob Weeks

Where’s Leadership on Oil Speculation?

In the July 12, 2008 Wichita Eagle, Kenneth James Crist of Wichita blames oil speculators for ruining the U.S. Economy, writing that politicians should "do something positive to halt the rampant speculation in the stock market and oil futures that is really driving these runaway prices. All it really amounts to is tremendous greed on the part of a few, at the expense of the many." I wish that Mr. Crist had read Futures Markets by the economist Walter E. Williams before writing this letter. In this article we learn this: The futures market, which takes into account both the…
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