Posted by: Hans Luftner

Seriously… I can hardly think of any referenced studies or data offered from your side. It's mostly all hand waving, matter of fact proclamations and attempted inculcation to The Invisible Hand.

Oh yeah the consumption data suggesting we're all equally prospering. That was easiliy and soundly debunked.

Seriously, what's the real world evidence that has you believing a libertarian society would optimize the human condition much less individual liberty?

What's the real world evidience that suggest a weakened libertarian government wouldn't quickly be overtaking by corporatist to their own benifit?

I think there is NONE!

Maybe I'm missing your point but the credit rating agencies are private companies. They certainly dropped the ball as well. If they were doctors they be sued at out their pants (actually I think they might be) and they'd loose their license.

Who could ever trust those nicompoops again?

The notion that private crooks could bring down a free market is questionable, if not absurd. But what is unquestionable, to me, at least, is that we shouldn't arm them with the power of "government."

Yup. We never even tried to present you with any substantive arguments or evidence. I'm sure if we did you'd read it. No one has, even once, tried explaining where we think you're mistaken.

Posted by: muirgeo

But it is also a clear slap in the face of those who favor more regulations since it was precisely those risk supervisors that were EMPOWERED by the regulators, namely the credit rating agencies, that played the pipe the financial markets followed over the subprime precipice.

Though markets were under-regulated in some areas, they were equally overregulated in others… for example banks weakened their credit analysis departments since… why do you need credit analyst for when you have the credit rating agencies to do it for you?

Posted by: Martin Brock

There is far more profit in actually hiding risk then offering useful products to avert or minimize risk.

But we're to believe if we just let it run it's course everything would work out… really… honestly… trust them just a little longer…just a little more time… it will work out. The problem you see is we just never let it run through until it's final self regulating, self correcting glorification reveals itself. All bow in the glory and greatness.. all praise to the Invisible Hand…just give it time.

"Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone."

— John Maynard Keynes

I bet the babies subjected to this particular idiot wish they had guns.

Posted by: Methinks

First of all YES absolutely, I can document lots of prospective dated articles from economists, politicians and others predicting the current disaster.

Secondly its not Wall Street babies with guns… its Wall Street Babies with loaded and cocked guns. Just not a good idea. They /you've proved to need serious oversight. Not just my words but the words of many expert economists… the same ones that saw the huge avalanching catastrophe that the Wall Street crowd was too stupid to see… actually I know they aren't stupid. In fact they are very smart… some even PhD in physics and mathematics and computer sciences… but they are evil smart… the most dangerous of all sorts of criminals. They do a disservice to your LaLa Land Libertopian ideas of how the economy can self regulate itself. In fact they prove it a totally dopey insane unworkable idea. They demote any potential rebuttal of your's to me to nothing more then name calling because you have nothing factual or substantial in your armament with which to defend yourself with.

Dr. T,

It doesn't matter what the default rate is by itself. What matters is if Fan and Fred's capital base is large enough to absorb the losses from foreclosure. If it isn't (and there's plenty of reason to believe it isn't), then Fed and Fran are insolvent. If they are insolvent, then there are suddenly a large number of assets coming to market and that has a negative impact on the prices of all similar assets, triggering margin calls and more selling of assets across the board to meet margin calls, causing even lower prices, causing more margin calls, etc. This sort of thing happened last summer when creditors suddenly decided that they would actually prefer to be compensated for credit risk. Again, I don't know if this leads to the complete and permanent destruction of the financial system, but I think the situation is worse than you're imagining.

I'm assuming this is referring to the resident idiot savant who calls anything he doesn't understand a product of "paper pushing Wall Street assholes" and "Wall Street babies with guns".

I bet the babies subjected to this particular idiot wish they had guns.

"Having tasted this easy way of living the people wanted more and ever more."
Posted by: vidyohs

YEP! And that's why you will never get rid of the welfare state so the best you can do is to optimize it's efficiency… like FDR, Kennedy or Johnson or Clinton did.
Posted by: muirgeo | Sep 11, 2008 10:29:56 AM"

YEP! And that's why you will never get rid of the welfare state so the best you can do is to optimize it's efficiency… like FDR, Kennedy or Johnson or Clinton did.

This is absolute regurgitant bull shit!

Here's the facts.

Regurgitant

BULL

CRAP

The subprime mortgage disaster is a result of Wall Street and it's creation of complex financial products that where designed intentionally to distort markets with asymmetrical information.

The mortgage crisis was a not only a failure of Wall Street at self regulating or of improving risk or of allocating capital properly… Wall Street failed in ALL these areas and it was intentional. A pyramid scheme built to fleece the American public. Probably the biggest heist of all time. It was a failure of oversight based on the presumption that markets are best left to regulate themselves.

The regulated lenders where far more insulated from the problems of that faced those babies with loaded guns and no oversight.

AND THAT's A SLAP IN THE FACE FOR THE LIBERTARIAN POSITION that is best countered with some more good heaping tablespoons full of denial.

The story is a nail in the coffin for

Hey, I actually agree with a lot of what is on the Mises site. I give them credit for consistency. They rail against corporate welfare as much or more then public welfare.

But regarding your claim that I'm unknowingly hurting people.. supposedly by my voting, I think I can at least make an argument that unfortunately we really have only two political choices and the evidence suggest to me that one is much less harmful then the other.

In fact, I would say the conservatives in control of our government who use classic liberal economic ideology as a foot in the door approach to act on their true cleptocratic ways are far more detrimental to the population then the democratic party. At least the democratic party tells you what they want in the form of better regulation. Right now the reality is that's the choice we have. I think I'm doing less damage in my choices both economically and socially with regards to peoples liberties.

I honestly would much rather see a Ron Paul or a Libertarian in office then another Republican. But it's just not a choice and a big part of that is the money that corrupts politicians and the so up of our electoral system so favoring incumbents.

I really wonder why you think I'm dangerous. Did FDR destroy our country? Seems like it prospered until the Viet Nam War. Do the European social democracies that offer health insurance to all their citizen and get 6 weeks off per year really have less liberty then you or I?

A Swede I was recently backpacking with in Alaska told me of how when her company moved from Switzerland to America and took on a lot of new American employees how she and the other Europeans thought nothing of the offered 6 weeks off while Americans were amazed an ecstatic.

"Having tasted this easy way of living the people wanted more and ever more."

It's the people, Russ. We, us, them, the people.

The Founding Fathers left us with all the tools, the philosophy, and the tradition to keep this a republic of the people, by the people and for the people. We, us, them, the people have the ultimate responsibility for everything that goes on with our government.

When things go wrong the ultimate responsibility falls back on those ultimately responsible.

Beginning in the early part of the 20th century the process of enculturating (using class envy as one huge tool) Americans to abandon their old conservative priciples of saving to afford. This shift in enculturation was so successful that by the mid century the people themselves were petititoning government to make the buying before affording much easier.

The idea of risking, working, and saving before buying became a thing of the past. Our whole nation from the village idiot to the President became enamoured with the idea of having and enjoying before risking, working, and saving.

Everything in our culture was slanted and geared to make having before affording the new normal and acceptable philosophy. Having tasted this easy way of living wanted more and ever more.

Well we got what we wanted and we got it good and hard.

That's a fact that can't be ignored or passed on to someone else.

“sooner or later, the ratings issued by the credit agencies are just a new breed of systemic errors, about to be propagated at modern speeds”

I did never read a single tenured professor speaking out to stop the financial regulators from going crazy and imposing the credit rating agencies on the markets so much.

I mean… supposedly… what are tenured professors for?

And a great summary of the Fannie Freddie issue by Paul Krugman

It's a great summary with one glaring exception, the last two lines.

"And let’s be clear: Fannie and Freddie can’t be allowed to fail. With the collapse of subprime lending, they’re now more central than ever to the housing market, and the economy as a whole."

Bullshit. What would the "failure" of FNMA mean anyway? A lot of paper shuffling. That's all. The houses would still be there. Existing mortgages would still exist, and more mortgages would continue to be written. If nothing else, the home builders would extend credit themselves while unwinding their own positions, some of them possibly declaring bankruptcy as well. We obviously have legions of home builders in this country, and a sufficient number would emerge from bankruptcy to meet the real demand. Only the "investors" (including many state agencies) in derivative securities with multi-million dollar price tags would "suffer" the "failure" of FNMA. I couldn't care less.

"Seperation of church and state…separation of money and state
Posted by: muirgeo | Sep 10, 2008 2:22:21 PM"

… most classical liberal thinkers or conservative thinkers have a very poor track record in the annuals of the web of predicting the current economic disaster …

I'm a "classical liberal thinker", and I can show you posts and emails over the last decade in which I called (certainly not alone) the top of the stock market in 1999 (by announcing my own exit from it) and the bottom of this market following 9/11 and the top of the housing market a couple of years ago. I also called the '87 corporate share crash (along with lots of other people). I didn't call the quick recovery but did see the crash as a buying opportunity, though I didn't take great advantage of it.

For the record, I'm calling the bottom of the U.S. housing market now. Maybe I'm off by six months or ten percent. We're leading this correction, and that's a good thing. Other housing markets are only starting to fall and have further to go, but our market won't fall indefinitely or even much further, because we're rearranging entitlements to protect established proprietors as usual.

We have lots of very nice housing in the U.S., so there's certainly no shortage of the real wealth. The tragedy is that Chinese laptop producers can't move here in droves and live in these houses, so we're selling them a lot of entitlement to tax revenue instead, for what it's worth, which ain't much 'cause we won't raise our own taxes much further. As such, we'll buy less from China in the future. That's the collapse of the dollar in foreign exchange markets. Chinese productivity will continue to grow, and they'll consume more of their own produce, and that's a good thing. They'll also consume more of our agricultural output with all of their entitlement to our tax revenue, so we'll pay more for food, but we're a fat lot anyway, so that's not such a bad thing.

The reason that "classical liberal thinkers" have a poor track record calling economic disasters is that we seldom have any real economic disasters to call. None of the "disasters" I called were real. The U.S. is not headed for a Great Depression or Hyperinflation. We're headed for something like the stagflation of the seventies, and that's bad enough, but few people will starve in the streets here. If you want a real disaster, move to Iraq.

The biggest problem we face in the U.S. now is demographic. We're right on the cusp of it, because the payroll tax surplus is peaking, and we're hardly discussing it at all. The rest of the world faces similar problems, and ours is not the worst by a long shot.

I'm going back to bed now. Saw this movie called "Bug" last night. It's really creepy and definitely worth a look if you like nightmares.