Category: Economics
Are We Angry Only Because We Were Caught?
In his column Welcome to ‘Moral Hazard’, Wall Street Journal editorial writer Daniel Henninger writes: For behind it all sat Fannie Mae and Freddie Mac, running mortgage liquidity into the nation’s neighborhoods like an open fire hydrant. Several years ago, when the Journal’s editorial board met with Fannie Mae’s top executives and pressed the issue…
Our problem is the manager of our money
Think of it: Nothing is more vital to capitalism than capital, the financial seed corn dedicated to next year’s crop. Yet we, believers in free markets, allow the price of capital, i.e., the interest rate on loanable funds, to be fixed by a central committee in accordance with government objectives. We might as well resurrect…
Dry-Cleaning Economics in One Lesson
The Foundation for Economic Education reports that an American clothes hanger company has succeeded in persuading the government to slap a tariff on its foreign competitors. Who wins? …the tariff is expected to cost some $212,765 for each of the 564 jobs saved. … The lesson is that the misguided attempt to save jobs for…
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…
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…
Rotten Paper, Toxic Paper
Pat Buchanan’s take on the current financial crisis. See Day of Reckoning.
Free market economists weigh in on Paulson’s plan
Reason Magazine asks free-market economists their opinion of the proposed bailout plan, and collects their results. Click here to read this excellent article.
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…
Lure of Earmarks Impossible to Resist, Even in Crisis
Bill Smith of ARRA News Service reports on earmarks worming their way in the agreement to end the current financial crisis. This agreement may have imploded on itself, but the lesson is clear. See the post Major “Earmark” in Democrat Bailout Agreement .