Do Something??

Lots of good work here. I can't post in depthn but I would suggest that the stock returns 1871-1946 vs the current period might be a very different comparison if expressed in real terms. IIRC, the overall price level was relatively stable until about 1946.

Lots of good work here. I can't post in depthn but I would suggest that the stock returns 1871-1946 vs the current period might be a very different comparison if expressed in real terms. IIRC, the overall price level was relatively stable until about 1946.

No business cycle? Well at mises.org for one . . .

I'm telling you that they aren't authorized by the federal government. The Constitution doesn't deny the federal government the ability to wield its constitutionally granted powers on state-created entities.

muirgeo,

You're a sad excuse for a debate opponent when you fall back onto the standard socialist tactic of attempting denigration, ridicule, and stirring of fraudulent feelings instead of addressing the points and issues.

Case in point:

"Said the guy who joined the Navy (thank you) and got a complete cradle to grave socialized smorgassboard of taxpayer paid benifits that will continue till the day he passes.

Said the guy who wrote this on the government spawned internet.

Yes, vidyohs....you're Randian independent self made man for sure."

It is as my brother said, "There is no such thing as a socialist thinker or intellectual."

My answer to your question, for the third time, was succinctly, "no self sufficiency, no vote and no input to public policy", that is how I see a society functioning without thumbsucking socialists voting on how public money is spent.

And your reply to the wisdom and practicality of that is..........?

Corporate charters are unconstitutional? Huh? Muirgeo, corporations are formed pursuant to state law. The U.S. Constitution does not prohibit states from exercising such power.

Posted by: Billy

You trying to tell me corporations aren't recognized at the federal level with regard to taxes and liabilities?

Hey Gil,

Which libertarian economists are you speaking of when you say the following: "'Tis interesting to hear the arguments from some Libertarians that if the economy was really laissez-faire then there'd be no such thing as a business cycle."?

Please be specific.

As long as the playing field for income is tilted towards the rich, powerful and connected a progressive tax is a poor but reasonable alternative to give back to the working people what the powwerful steal from them.

Unfortunately, it hasn't worked out that way. I think it was Walter Williams who revealed in his "The State Against Blacks" that more money is taken from poor communities via taxes than they receive from the government in benefits. Warmaking and international military bases are very expensive, ya know.

OregonGuy,

Yes, you are correct; the TVA (as it happened) happened because of centralized planning and taxpayer money. But remember: every dollar spent on it was one less dollar spent freely by individuals elsewhere in the economy.

I admit that government can achieve these kinds of ends. The problem is, they were achieved through coercion rather than through persuasion (market mechanisms). Eventually, those serviced by the TVA would have had power provided by a private company, guaranteed. It may not have happened as the bureaucrats and planners wanted it to happen, but it would have happened.

Amity Shlaes recent book The Forgotten Man includes a great discussion of the TVA and how the federal government basically strove to drive private suppliers of power in the South out of business.

I agree with your view that markets are best left to sort themselves out. And Murray Wolfson, in his "A Reappraisal of Marxian Economics" (Columbia University Press, 1966) talks eloquently about the effects of central planning on capital formation.

But it has to be admitted, doesn't it, that the TVA exists solely because of the kind of central planning that was put into place...along with its concommitent increase in public financing?

Just a thought.

Government is nothing more than a legal fiction, an agreement amongst people.

The market place as spoken of by most people is also a fiction.

The reason central planning by governments, of course, fails so miserably is for that reason. Their regulations and interference can not possibly take into account all the sudden, spontaneous, and totally unpredictable directions an indidividual's, or a group of people's, wants, needs, and desires may go.

What each of us has to remember is that each individual is a market, and a marketplace is created by two people meeting and exchanging goods or services, i.e. where the market meets and is conducted becomes a marketplace. I am a market looking to buy, and you are a market looking to sell. A market is a singular thing not a plural thing.

When in the distant past many individuals had wants and needs it developed that everyone was better and more efficiently served if a known meeting place was established for markets to meet. That known meeting place where markets met became known as "the marketplace".

No central planning can ever deal with, in the USA, some 300 million markets all looking for a place to conduct business to meet their individual desires, wants, and needs by matching exact goods, services, and prices to satisfy each. Extrapolate that out to over six billion markets worldwide and you have compounded the impossibility to.....what? I couldn't measure or quantify that problem.

When folks talk about economics and economies and forget that basic they get lost and say and do strange things.

One of the important things I have learned is that the market is more important to an honest self sufficient individual than government is. People can and have lived effectively with no or very little government, but one market absolutely needs another market in order to survive, thrive, and have any measure of security and comfort.

This little bit of input comes from nothing more than plain common sense and observation of what is happening in the world around me.

Sam Grove,

"If I may paraphrase:

Government is what it is, not in spite of who we are, but because of it."

You certainly may paraphrase, and I can certainly support that side of the same coin as well.

Corporate charters are unconstitutional? Huh? Muirgeo, corporations are formed pursuant to state law. The U.S. Constitution does not prohibit states from exercising such power.

But when the majority can steal from a minority (progressive taxation), the government is no longer doing its original job (secure the life, liberty, and property of its citizens).

Posted by: Eric

See I don't see it that way. I see a minority stealing from the majority. (Corporate charters and bribery of public officials...both not constitutional based on the same assumptins you make about progressive taxation).

Straight forward YES/NO question. Would you agree to get rid of all corporate charters if we got rid of progressive taxation AND every possible tax write off?

My answer is NO WAY! Wouldn't do it. Mostly because I wouldn't want to get rid of corporate charters....not so much of concern with the tax issues.

However, I never considered Robinhood a crook. As long as the playing field for income is tilted towards the rich, powerful and connected a progressive tax is a poor but reasonable alternative to give back to the working people what the powwerful steal from them.

This springs from your premise that society must be ruled by a hierarchical political administration.

Posted by: Sam Grove

Sam,

A constitutional democracy is the best attempt to avoid top down governing. It's the best attempt to diffuse the power of politicians. I just believe it does neeed an informed citizenry and the process needs to truly represent the will of the people not of payors and their bought politicians.

Said the guy who wrote this on the government spawned internet.

Always the assumption that just because something occurred under soem auspice of government that it would never have occurred otherwise.

"We are what we are, and who we are, not because of government but in spite of it."

Posted by: vidyohs

Said the guy who joined the Navy (thank you) and got a complete cradle to grave socialized smorgassboard of taxpayer paid benifits that will continue till the day he passes.

Said the guy who wrote this on the government spawned internet.

Yes, vidyohs....you're Randian independent self made man for sure.

"We are what we are, and who we are, not because of government but in spite of it."

If I may paraphrase:

Government is what it is, not in spite of who we are, but because of it.

Muirgeo:

Once, when I ran for congress, a newspaper reporter asked me if the government should subsidize oil or coal. Of course, I said "neither", but I bring it up because you hold that we must live with a similar meager offer; Democracy or tyranny.

This springs from your premise that society must be ruled by a hierarchical political administration.

I'm not going to bother trying to describe an alternative to hierarchical rule for you as you are always poised to dismiss even the possiblity of such, but I will suggest that the reason people need a political hierarchy is because that is what they, by and large, believe.

"And as usually for the 50th time tell me what you want to replace this democracy with and how do we do that?...with a vote?...or by force?"

Muirgeo, I think that I am speaking for many libertarians/classical liberals when I say this:

We would like to see a return to the government provided for us by our constitution. Limited national government, no income tax, and "rights" meant things that the government COULD NOT take away, not things that one could demand of others.

Voting eligibility issues aside, the original form of our country was that of a republic, not a democracy. Arguably, we've shifted more to the latter as the federal government has dramatically exceeded its original role.

Impractical as it may be, most of us here would like to see the federal government get out of our daily lives and the economy as a whole, as it once did.

Democratic institutions -- strictly checked by a constitution -- are fine. But when the majority can steal from a minority (progressive taxation), the government is no longer doing its original job (secure the life, liberty, and property of its citizens).

muirgeo,

You ask: "And as usually(sic) for the 50th time tell me what you want to replace this democracy with and how do we do that?...with a vote?...or by force?

I gave you the answer on another thread and asked you to answer it there, you chose to dodge it. So I ask it again.

muirgeo,


Speaking of addressing ideas, thanks for your focus on my attitude towards how to deal with thumbsuckers; but I'd really like to hear you dispute the wisdom in these two paragraphs.

"muirgeo, my own personal opinion is that anyone who receives as charity (public or private) any portion, no matter how small or from what source, of what it takes to provide for his/her existence should never be allowed in a voting booth or to speak or write about public policy. Iron-clad censorship of thumbsuckers vis-a-vis public policy.

A person such as described in the last paragraph was never intended to have the vote and should never be allowed to decide on how any public money is spent. Wise men through history recognized that and our founding fathers certainly did."

In view of your quoted question I think my proposal deserves a serious answer.

And this? "One of the big things that bothers me is how republicans hate democracy but lie to the people just to get their votes. They know they can only win if the vote is suppressed."

My God you must think we are all brain dead out here in freedom land!

The King of Guadalupe County asked Lyndon in his run for Senator, "How many votes do you need?", and then delivered enough by voting the graveyards, the incarcerated, and anyone else not registered and actually on the roles as having voted....and I am not sure that the last was not also violated.

Democrats descend upon old folks homes, assisted voting......er..living centers, and altzheimer homes and see to it that the feeble and disfunctional vote democrat on their absentee ballot.

Here in Harris the newly elected republicrap absolutely caused hysteria in the democrappic community by purging dead people, incarcerated people, and noncitizens from the county voting registar. From the venomous outpouring of hatred by the democraps one would have thought he was a baby raper.

Your version of what is happening in the political scene vis-a-vis vote scamming is highly comical to those of us who see the real thing played out on the ground each year.

Henri:

What's important is not the measures, it is the standard of living. Speak to those who lived through the era and you will find that, for most people, their standard of living did not exceed what it was in the 1920s until well after the war was over.

The standard of living during the war was even lower that it was just prior. The economic numbers went up, but goods were being produced for destruction rather than consumption. Many goods were rationed or unavailable. Don't fall for the foolish notion that wars are good for economies.

The economy grew post war because governments largely got out of the way (several by force) and allowed people the freedom to rebuild. The economic and political momentum of this relatively free rebuilding carried the world economy well past where it started prior to the war.

Freedom is prosperity, both intrinsically and extrinsically.

Sam Grove,

I agree with you, your last most specifically. Succinctly it can be said,


"We are what we are, and who we are, not because of government but in spite of it."

Spencer,

In the late 1800s the average lifespan of people on the planet was about 30 years. Now it is about 60 or so.

The Olympic games were "re-started" in 1896.

It is clear from my analysis that the Olympic games caused the life expectancy to rise.

------

There is a strong correlation between when my car is wet and when it rains. I believe that the wetness of my car causes the rain in my neighborhood, but the guy down the street thinks its his lawn that is doing it.

Muirgeo,

reading this last comment, I reminded of what vidyohs said way upthread to you:

You demonstrate both in your ability to give answers to questions that haven’t been asked, as well as your ability to mis-state issues and facts in the casual way

This is exactly what you just did in your latest comment above.

Democracy is no guarantee of anything and usually is no more than the illusion that citizens have any control over the administration of political policies.

Posted by: Sam Grove

Democracy is not perfect but it is the best thing going. And I do indeed feel the answer is more democracy not less.

And as usually for the 50th time tell me what you want to replace this democracy with and how do we do that?...with a vote?...or by force?

One of the big things that bothers me is how republicans hate democracy but lie to the people just to get their votes. They know they can only win if the vote is suppressed.

Given that politicians will always feel a need to respond to the ever-present demand to "do something" I suggest we come up with a "something" for them to "do" that looks good but doesn't actually do anything. You can not fix politicians but you might be able to channel their energy somewhere else less destructive.

I have a technical question, and here's hoping it won't get lost in the rhetorical scuffle.

Prof. Boudreaux writes:

"On the eve of entering World War II in 1941, America's economy was still quite depressed -- as it had been for more than a decade"

I have argued this point with statists before. There is a fairly wide-spread belief that the war alleviated the depression.

If we take it for granted that the economy remained depressed until 1941, then this position makes depressing sense (no pun intended).

Looking at numbers from BEA and eh.net, it seems that the economy started a recovery in 1939. If true, this explains why the economy grew during the 40s. The government was able to finance the war on top of a private economy that was finally beginning the thrive.

OTOH, if the economy didn't start growing until 1941, then is this not consistent with the view that the war effort helped the economy along?

I know there is a branch of economics that are sceptical of macro-economic data, like the GDP, but with this approach, I'm not sure how we even know there was a depression in the 30s, and how to measure its beginning and end.

So my question to the learned is: When did the depression end, and how do we know it ended at that time?

From 1871 to 1946 -- as far back as we have data -- the average annual increase in the stock market was 1.7% and the stock market was in a bear market almost 50% of the time. Moreover, the 1930s does not distort these comparisons because they would be almost exactly the same if you end the comparisons at 1925. The data is from the work Robert Shiller did.

If you compare this record with the modern record since 1946 when the government took on a major role you can clearly see that the stock market has done massively better in the modern era.

But you leave out a significan factor: the tremendous gains in productivity due to the industrial revolution.

It is a sad irony that these productivity gains enabled the growth of government.

It certainly is not that case that growth of government enabled gains in productivity.

Note where I tried to explain it a few comments up. It just doesn't register.

It appears to register, but retention seems to be an issue. Muirgeo is not integrating all the information given him in this arena, hence frequent backtracking and reiteration occurs.

I'll state an overview here for Muigeo.

The state is an institution of extortion, it uses fear to implement its policies.

The market rewards actors for producing the goods and services that others need and desire. It is through cooperative effort that wealth is created and it is through competition that wealth is created more efficiently.

When government intervenes in the market, it brings its tool of fear into the arena of the market.

Libertarians may support govenment to the extent that it ensures that market transactions are engaged in voluntarily and that such transactions do not impose involuntary costs on third parties.

Libertarians do not support business or corporations per se, but rather support the right of people to participate in voluntary transactions free from interference by others. Libertarians hold all individuals as equal in this regard.

Libertarians oppose the threat of violence EXCEPT when used to counter the initiation of such threats.

---------

When government seeks to 'regulate' the market will attract the interest of those to be regulated. One way or another, they will endeavor to affect such regulation for their own benefit.

Politicians are aware of the benefits of this relationship. Any legislation proposed to abolish this relationship will have to pass through the hands of those that benefit from this relationship.

The ultimate source of this corrupting affect is the implementation of political power.

Muirgeo: "But, but, but,..."

Democracy is no guarantee of anything and usually is no more than the illusion that citizens have any control over the administration of political policies.

Nathan -- you tell me that correlation is not causation and than make an argument that depends exactly on that premise --beautiful.

Swords Crossed Topic on this matter has been posted with special interest given to Muirgeo and vidyohs. I invite all to join and spread discussion arena. I refer to the GMU blogs and other libertarian/economic sources quite a bit.

Note where I tried to explain it a few comments up. It just doesn't register.

The economy of the last 25+ years has been run by the deregulationist and the laissez faire minded.

Where do you get this idea?

Laissez faire minded people don't "run" the economy.

Hasn't anyone explained this idea to you before...again and agian?

Your first full paragraph makes the implication that Don, and others, are in approval of the Fed’s action.......What is your purpose in misrepresenting Don’s obvious position?

vidyohs

I honestly meant that as a question to Don when I asked,"Was THAT government action OK?", as I wasn't completely clear of his position.

I'm glad you cleared it up for me that he does indeed disagree because if he did endorse such action by the feds it does seem contradictory.

spencer--you can't honestly be so dim as to not understand that correlation is not causation. How about this for an alternative theory: government is a parasite leeching off the success of the free market. When the economy is small, government must stay small as well. As the economy booms, the government can increase in size along with it without killing the host. This is also a nice explanation of why larger government is correlated with higher stock returns.

Since this discussion references the Fed's moves to "maintain liquidity", I have to ask this question:

Why is it so important that bondholders not take a "fire sale discount" in a liquidity cruch, but NOT so important that homeowners not take a fire sale discount in a real estate liquidity crunch (i.e. when they foreclose and have to sell)?

Why doesn't the Fed buy up homes that people sell at auction to cover a position?

Vidyohs,

Very impressive response to Muirgeo.

I'm going to use this topic, along with the the Q&A between you and Muirgeo as a discussion piece on the front page of Swords Crossed.

BTW, I invite you all to join and share your thoughts. There are plenty of people like Muirgeo there to deal with.

I will repost a link to the topic when it is ready.

'Tis interesting to hear the arguments from some Libertarians that if the economy was really laissez-faire then there'd be no such thing as a business cycle. Yet why? An sucessful business owner would be more flush with money since there are no taxes or regulations to stand in the way, more wanting to invest the money for greater gains, investments are booming, investments go belly-flop, in the poor house, no welfare, many people sceptical about investing, a gold coin becomes more valuable over time (or the very doesn't lose its value) then hoarding spare gold coins is more sensible in the short term until eventually a handful startups and the process begins again.

But anyway LCJ you use a well-worn argument that if everyone played nice then the world would be a better place. Yawn. Nope plenty aren't playing nice despite that notion is older than the hills and everyone's probably heard of it. 'Twas interesting though when I used to think 'why is it villages are generally nicer than cities where everyone seems to know one another and apparently care'. One answer was 'well I suppose in a village people rely on one another and if a village is hard done by, everyone is a little more hard done by, therefore people in a village help others more perhaps. And conversely in a city, 'one person suddenly drops dead, it really doesn't matter to city folk life goes on and someone else will fill the job the other one left behind' (assuming they had one). Then 'lo and behold' I found out that this mentality is referred to as 'Prisoner's Dilemma' and now I realize why the world is far from perfect!

One last point isn't a laissez-faire economist advocate really some sort of martyr? What economic jobs would there be when the only economic advice is 'let the market decide'?

Larry Kudlow wants nust be right on.

A market economy is a free economy that is "run" by millions, if not billions of daily individual decisions. There is no man behind the curtain!

Posted by: Eric

Eric,

That's a good point but I just can't believe that a "free market" wouldn't devolve into abuse of power by those accumulating ever increasing amounts of wealth and power.

Also I thought the term a market economy was used to suggest a regulated economy as opposed to a "free market" economy.

I still have the belief that the millions and bilions of decisions people make to run the economy are only as equally important as the decissions they make to run the country from the bottom up via the constitution and democracy.

I think my conclusions are born out by the fact that all major current economies are mixed and that none exist that are "free". If free markets were so successful why do none exist.




My point being rather then disregarding all legislation as useless and ineffecient we need to minimize legislation were posible and optimize it when it can't be avoided.

The biggest inefficiency in my opinion is caused by money crossing from the private sector to the government. I appreciate many of Dr. Boudreaux's arguements but I'm frustrated that they always focus on "bad legislation" as if its the only thing affecting competitive markets when many times the people driving the markets are usingf their power and money to influence legislation that decreases their competition. I'd argue that this problem corrupts markets as much or more then bad legislation. And in fact they often go hand in hand.

If you look at legislation over the last 3 congresses its very hard to find ANY that benifits the common tax payor and almost all of it that benifits big business. That's not right.

The stock market is actually one area where we do have good data on the comparison between an economic sector under a system of minimal government and one under government regulation.

From 1871 to 1946 -- as far back as we have data -- the average annual increase in the stock market was 1.7% and the stock market was in a bear market almost 50% of the time. Moreover, the 1930s does not distort these comparisons because they would be almost exactly the same if you end the comparisons at 1925. The data is from the work Robert Shiller did.

If you compare this record with the modern record since 1946 when the government took on a major role you can clearly see that the stock market has done massively better in the modern era.

Don has a theory that the government makes everything worse. But in this example we clearly have a major case study that strongly contradicts his theory.

Now, what should I use as the basis for my judgment; his theory or the facts that clearly contradict his theory.

Muirgeo,

Let me open by saying that I recognize education in a person, and I recognize skill. You demonstrate both in your ability to give answers to questions that haven’t been asked, as well as your ability to mis-state issues and facts in the casual way that would lead an uninformed reader to assume that you had the correct position. It is the skill of a practiced propagandist.

Don Boudreaux, and his fellow blogger Russell Roberts, consistently preach the gospel of free enterprise, Laissez faire, and a market place free of government planning, regulation, and interference; and, they do so by presenting good factual data and sound reasoning. I believe that they support my freedom in every way. You, muirgeo, on the other hand consistently, and on virtually every detail, make the attempt to under mine their position through use of the skills I mentioned above. My question to you is who do you represent and what values are you promoting that are so consistently in opposition to Don and Russ, not to mention the majority of those who post here?

Now let’s address your post.

Your first full paragraph makes the implication that Don, and others, are in approval of the Fed’s action of pumping huge sums of money into circulation to offset the effects of the subprime mortgage problem. Yet I defy you or anyone else to point out where Don, or others responding prior to you, made that endorsement. Everything I see in Don’s writings lead me to understand he disapproves of that Fed action. As a matter of fact the third paragraph of his letter to the editor even makes it clear that he believes the government should butt out and let the market handle the problem. What is your purpose in misrepresenting Don’s obvious position?

Second paragraph. It is ludicrous to suggest that an economy such as ours that is heavily slathered with regulations on the most minute detail of the market, tariffs, taxes, and governmental oversight, could somehow be deregulationist and Laissez faire. The examples to shoot you down here are just too numerous to bother going into. As recent discussion points out, our economy and the markets are so heavily regulated that personal responsibility has been completely eliminated from transactions; i.e., an undisciplined child destroys a toy and swallows a component. Do I need to go down that road again?

Finally the clinching sentence of that paragraph, if we accept the theory of the left that “failed diplomacy” and “foreign policy” are the prime contributing factors in the Muslims attacking us on 9/11, then yes Clinton would have to share a large portion of the blame. I don’t think Muslims were very thrilled to have an aspirin factory bombed in the dead of night and cruise missiles randomly lobbed into Afghanistan simply to provide distraction from his sexual escapades with Monica. The Muslims aren’t stupid, they knew as well as we Americans did why Clinton took those actions. To finish, if there be any evidence that our economy is teedering(sic)(the word is teeter) then the cause can be more correctly laid at stupid and unnecessary regulations, tariffs, taxes, and oversight.

Third paragraph. I believe Don did blame Smoot-Hawley on the Republicans, but he also correctly pointed out that the FDR democrats used it to make the nation even less able to recover. ((Your skill at duplicity is excellent in this little paragraph.))

Fourth paragraph. In the first sentence I am not sure what you meant by “increased climate forcing caused by”. What is “increased climate forcing”; this is a new one to me. Is there now a new field of study in “climate forcing”, and where can I go to find information on that subject? By-the-by, no matter to the real subject which is how will the market respond to global warming? That is easy to answer. Left alone it will respond very well, interfered with by government we will have the typical mess that government always brings with imposed “solutions”. But here again your ability to dissemble is shown. First there is no solid evidence that the Earth is warming so rapidly that market adjustments and consumer patterns will not be able to adjust smoothly. As a matter of fact the warming evidence presented by the whackoenviros seems to be steadily disproved by on-going research, so the verdict on global warming is not in and is certainly not urgent. Now, again there is no solid evidence that what warming is seen is precipitated by mankind and not part of the natural cycle. As a natural part of nature, of course mankind contributes to the make up of the atmosphere as does the burping of mosquitoes and there are trillions and trillions of mosquitoes.

Fifth paragraph. The answer here is, go back and reread slowly everything that Don and Russ have ever written about supply and demand.

Sixth paragraph. Socialist to the core, and nonsensical as well. I can’t imagine where you picked up the notion that any economist has ever suggested that they would be the central figures in planning a global society, which certainly has more to it than just economics. Even though history has proven over and over again that central planners and planning will always make a mess and cause any economy to spiral into death, you suggest going down that road again is wise or justified.

Seventh paragraph. If you seriously believe that Don’s focus and teachings are about his concern with short term stock returns, then I suggest it is you that is uninformed and who practices poor thinking. But, then I refer back to my opening two paragraphs.

Price fixing works equally poorly, whether it is for gasoline ala Chavez's Venezuela, or bread ala France, or stock prices ala Wall Street.

I agree with Don on that, less is better.

Do you really agree with Don about that?

And I'm amused that Don can't write about anything without at least one Smoot-Hawley reference.

I am amused and amazed that the concept of trade -- the VOLUNTARY lawful exchange of goods, services, commodities, or assets between two or more parties, free of corecion, and exchanged to make all parties better off than they were before -- still has not resonated with you. Perhaps there's just too much freedom in that for your tastes.

The government will do something because the rich white men who "own" the government are suffering. I agree with Don on that, less is better.

Plain folks have been losing homes to foreclosures since 2000 and no one has cared, no need to start now.

And I'm amused that Don can't write about anything without at least one Smoot-Hawley reference. It is like the people in NYC who are still upset that the Dodgers left town.

"The economy of the last 25+ years has been run by the deregulationist and the laissez faire minded."

I think the whole point of laissez-faire policies is that NO ONE "runs" anything. Not the president, not Congress, not labor unions, and not "big business." A market economy is a free economy that is "run" by millions, if not billions of daily individual decisions. There is no man behind the curtain!

The current subprime debacle will take care of itself. Yes, some people will lose their homes, and yes, this is sad. But these people couldn't afford the homes they purchased in the first place!

Yes, Muirgeo, a market economy is not all about happy Americans dancing through the daisy fields. When people make mistakes or poor decisions they will have to pay for them. That is a consequence of liberty. Most of us here prefer that people face those consequences -- and then learn from them.

First didn't the Federal reserve pump in like billions of dollars not millions? Was THAT government action OK? And here I ask a sincere question I don't claim to know the answer to, doesn't that action mostly protect the billionaire paper pushers on top while doing little for the guy who is losing his house?

- Yes, they did.

- If by government, you mean to say a quasi-governmental institution whose members are private banks that provide private banking services to individuals and businesses, thank I'm not so sure I have a good answer either way since it wasn't my call.


- Protect? I don't know if it protected anyone but it sure seemed to be a reactive political decision based on fear of volatility. As to the guy losing his house: why couldn't that guy abide by the terms of the loan that he agreed to...at least he had a home for a liitle while. And who really lost more in that transaction, the guy with the home who might have been able to tap its equity or the idiotic lender who got stiffed because the guy didn't follow through with the terms of the contract he signed? The guy with the home may have a blemish on his credit history but the lender lost real money...but that's okay, the lender was rich and could afford it.

The economy of the last 25+ years has been run by the deregulationist and the laissez faire minded. Now as THEIR economy teeders on the brink of disaster we are going to set the stage to blame it all on the Democratic party? That's like blaming 9-11 on the Clinton administration.

There was some deregulation and it took place almost out of necessity, it was either that or provide massive subsidies and outright government takeover, which, in some cases, did happen; it is a good thing that there were times where deregulation won the day. You mean YOU do not participate in this wonderful economy that supposedly teeters on the brink of disaster? It's no wonder, then, that you're so bitter...watching everyone else succeed.

So please tell me how the market works its own way through the climate change if it is indeed real. How do the externalities correct for the cost of a barrel of oil or reflect its true cost? How do they effect the availability of electric cars or the cost of gas cars?

It will. And if I knew the answers to your questions or what might serve as a better substitute for oil in the future, I would be busy trying to capitalize on how I could profit from it, not spending my time discussing matters with Very Smart People, like yourself.

Global warming is indeed a threat to economist because it indeed suggest that planning a global society sometimes requires planners other then just economist.

It depends on the ideology of the economist. A planner might like to have an economist whom has disdain for Homo-economicus (look it up yourself if you're curious).

See most people see many other significant things in the world other then our short term stock returns.

Yep, they do. It's just unfortunate, in my opinion, that liberty is rarely one of those significant things to them.

Rambling...sorry...will stop now...

No, no, no...go on, please.

Alright guys here we go.

First didn't the Federal reserve pump in like billions of dollars not millions? Was THAT government action OK? And here I ask a sincere question I don't claim to know the answer to, doesn't that action mostly protect the billionaire paper pushers on top while doing little for the guy who is losing his house?

The economy of the last 25+ years has been run by the deregulationist and the laissez faire minded. Now as THEIR economy teeders on the brink of disaster we are going to set the stage to blame it all on the Democratic party? That's like blaming 9-11 on the Clinton administration.

It's like blaming Smoot-Hawley on the democratic party when it was formulated and signed into law by Republicans all.

Finally, on global warming, how else is the market to respond to increased climate forcing caused by man-made greenhouse gases other then through intellectual scientific understanding by the large majority of consumers who actually care about long term risk to things OTHER then their stock returns...ohh I don't know say things like their daughters future.

So please tell me how the market works its own way through the climate change if it is indeed real. How do the externalities correct for the cost of a barrel of oil or reflect its true cost? How do they effect the availability of electric cars or the cost of gas cars?

Global warming is indeed a threat to economist because it indeed suggest that planning a global society sometimes requires planners other then just economist.

See most people see many other significant things in the world other then our short term stock returns. A mono-culture of cities with Home Depots and Walmarts that all look the same has a high cost associated with it regardless of their "productivity". Rambling...sorry...will stop now...

I am eagerly awaiting some of those Very Smart People to show up and begin posting to this permalink.

Dr. Boudreaux:

How dare you to be so unsophisticated as to suggest that our complicated economy of today not be managed by really smart people.

Laissez faire would cause huge unemployment among the ranks of really smart people. What would they meddle in? How could they feel important? Who would tell them they are really smart people?

Have you no heart?