Interventionism

Beyond Bailouts Is Recommended

I recommend BeyondBailouts.org as a place to learn about the current situation in our financial markets. From their site: BeyondBailouts.org is a joint venture of the National Taxpayers Union (NTU) and Competitive Enterprise Institute (CEI). The purpose of the website is to educate about government’s role in our current financial difficulties, suggest reforms that address those root causes, and provide a clearinghouse for the latest analysis of the financial crisis. But most of all, it’s an outlet for Americans to contact their Members of Congress and the Administration to express their frustration.
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Firms that made wrong decisions should fail

So says Anna Schwartz. She co-authored, with Milton Friedman, A Monetary History of the United States. She has insight into what's going on right now. Read the Wall Street Journal's Weekend interview Bernanke Is Fighting the Last War.
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1,000 to Protest Attack on Free-Market Principles at U.S. Capitol

I am one of these people! Amidst Market Unrest, Americans for Prosperity Gathers Citizens to Protest Big-Government Power Grab WASHINGTON – About 1,000 citizens will gather in front of the U.S. Capitol on Friday to participate in a free-market call to arms by the grassroots group Americans for Prosperity (AFP). Amidst market uncertainty, and just weeks away from a crucial election, the crowd of citizens from 38 states around the nation will protest a looming big-government power grab and rally to the defense of free-market, limited government principles. The rally will kick-off at 2:30 p.m. on Friday, October 10, in…
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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 of financial risks, we were told by way of ending the conversation that Fannie was merely fulfilling the "mandate of Congress" to spread home ownership across the land. Congress, of course, is a temple to moral hazard. ... For all the wailing about the high…
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Our problem is the manager of our money

Judy Shelton makes this case in the Wall Street Journal editorial Loose Money And the Roots Of the Crisis: 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 Gosplan, the old Soviet State Planning Committee, and ask them to draw up the next five-year plan. "There are numbers of us, myself included, who strongly…
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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 domestic hanger manufacturers comes at the expense of other domestic employment. Failure to base policy on Hazlitt’s wisdom has led to the substitution of political competition and bureaucratic fiat for the market process. Not only has M&B [the domestic hanger maker] enriched itself by using…
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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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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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