The Libertarians’ Lament

Just as Jacob Weisberg theorizes on our (libertarian) view and describes our arguments as "mild entertainment" I find his denial of the facts humorous too. One thing about Liberals, they don't like to talk about facts:

#1 What bout the poor innocent Americans that bought a house they couldn't afford by lying about their income (Stated Income Loan) or knowingly entered in to a ARM contract thinking they could flip the house before the loan adjusted, or simply thought they could get an interest only loan and then flip the house as it appreciated to no end.

#2 The American Reinvestment Act of 1977 "encouraged" banks to invest in poor communities by making loans to the citizens in those neighborhoods. It sounds nice, specially if you talk about the American dream, and all that sweet stuff; reality is that at that time only 60% of Americans qualified for a home loan. In order to move up the percentage to 70% banks had to lend to people that didn't qualify. How? By lowering standards. Why? Because if they didn't the next branch office would not be approved, or the next merger or acquisition would be denied. In this "historic" meeting, they developed creative financial tools in order to qualify these people: Stated Income, Interest only, and ARM.

#3 In 2000 some of these loans started going bad, in order to keep the banks lending, Congress got involved and through Fannie and Freddie they bought this bad debt and injected liquidity back into first line banks so they could keep lending. Funny thing is that records exist about these meetings and hearings and Fannie/Freddie Executives are quoted in saying that loans which were previously denied by them are not approved thanks to the new relaxed qualifications.

#4 In 2004 Republicans and Regulators were concerned about lending practices by Freddie and Fannie. They warned about a possible catastrophe, but as the video indicates, Democrats were not worried, they thought Freddie and Fannie were doing a great job and were even bothered by the fact they had to come to work and listen to their concerns. www.youtube.com/watch?v=Yga7TlsA-1A

#5 Bernie Franks and Chris Dodd drove these agencies to bankruptcy and facilitated the continuation of what eventually would become a recession.

As my last point, Libertarians are okay with some regulation, but not the massive movement to socialism being pushed by the Obama administration.

Very truly Yours,
Sergio

Most libertarians are actually classical liberals. There has been a shift in both the Democratic and Republican parties towards favoring big government. Historically, one of the parties has been for big government, while the other party has favored less government control. Now that we have two parties who both want big government, libertarians are now trying to fill that gap -- a party that wants to keep the government from becoming so powerful that our rights are being infringed.

The author of this article does not have a real understanding of libertarian idealogies, when in fact, there is a very good explanation for why we are in the mess we are in, and a very good way of fixing it.

The author is also quick to point out that there have been many financial crises in the past, but fails to recognize that these financial crises all arise from the same root problem. Read this article published in 1966 by Alan Greenspan, called "Gold and Economic Freedom," which will explain what causes our economy's instability in the first place. http://www.financialsense.com/metals/greenspan1966.html.

Also, click on some of those links from jpjohansen. Get the facts and understand the logic behind libertarian idealogies before making a judgment based on this article, which was apparently written by someone who doesn't mind writing about subjects he knows nothing about.

Jacob Weisberg claims:
"A source of mild entertainment amid the financial carnage has been watching libertarians scurry to explain how the financial crisis is the result of too much government intervention, not too little. [...] But libertarian apologists fall wildly short of providing any convincing explanation for what went wrong. Like all true ideologues, they interpret mounting evidence of error as proof that they were right all along."
For examples of libertarians explaning what went wrong.rather than interpreting "mounting evidence of error as proof that they were right all along", I'll restrict myself to some explanations predicting the actual crash <em>before it finally occurred:
There are such examples from June 2002 (Ron Paul, http://www.house.gov/paul/congrec/congrec2002/cr071602.htm), October 2002 (Gary North, http://www.lewrockwell.com/north/north142.html), August 2003 (Christopher Meyer, http://mises.org/freemarket_detail.aspx?control=450), June 2004 (Mark Thornton,http://www.mises.org/story/1533) or December 2005 (Stefan Karlsson, http://www.mises.org/story/1985). Several books were written on the why and how of the (then) coming crash, e.g. Bonner, William: Financial Reckoning Day or Schiff, Peter D. (2007): Crash Proof. And these are just expamples from authors within the US.
All of them have two things in common: one, they follow the methodology of Ludwig von Mises of the Austrian School of economics. Two, they are either ignored or partonisingly dismissed by the Old Media. But in the time it takes to read Mr Weisberg's article, one could do a google search on the topic, end up with the information cited above and thus, I am afraid, better informed.

The Cato Institute isn't exactly the flag ship of libertarian Thought. Instead I would recommend The Ludwig von Mises Institute. 518 Magnolia Auburn, Alabama or on the web at www.mises.org

and the rest of this article is just embarrassing when one considers that the only Real Libertarian in D.C. is the lonely Ron Paul who is (like most libertarians) In favor of abolishing the federal reserve and returning to the gold standard! Alan Greenspan! someone didn't do their homework.

And the market melt down is due to artificial credit expansion via the fractional reserve banking system and the federal reserve. It isn't simply a matter of government regulation as in the case of the Fed, but also a case of license and turning the other way when it comes to the banks. Checking account should require 100% deposit on hand at the bank instead of it being lended out and thus adding to inflation.

as a end note, Since I'm sure NewsWeek is against the war in Iraq, It should seriously consider that without the inflation created by the federal reserve and the fractional reserve banking system there would be no way possible to afford the war.

Cato Institute?

Yeah considering the country is run by democrats and republicans you can hardly blame the Libertarians. But we wouldn't expect Dems and Reps to blame themselves right? Especially since the Libertarian party has more support behind it in this election than in history. Well, not including the founding fathers.

Libertarian ideas don't work with a general population of runny nosed americans that have been trained to let uncle sam do their thinking for them. Libertarianism would require the people to be informed and educated. Democrats and Republicans have spent a lot of years getting rid of those ideas in this country.




Yeah considering the country is run by democrats and republicans you can hardly blame the Libertarians. But we wouldn't expect them to blame themselves right? Especially since the Libertarian party has more support behind it in this election than in history. Well, not including the founding fathers.

Libertarian ideas don't work with a general population of runny nosed americans that have been trained to let uncle sam do their thinking for them. Libertarianism would require the people to be informed and educated. Democrats and Republicans have spent a lot of years getting rid of those ideas in this country.

man, thanks for sending me that...I think. Man alive! That article really pisses me off.


Libertarian ideas don't work with a general population of runny nosed americans that have been trained to let uncle sam do their thinking for them. Libertarianism would require the people to be informed and educated. Democrats and Republicans have spent a lot of years getting rid of those ideas in this country.

man, thanks for sending me that...I think. Man alive! That article really pisses me off.

UNBELIEVABLE! Why ask people to take individual responsibility for the economic situation when Liberals can blame entire groups of people for their own malfeasance?! When we moved to Denver, Colorado from Ogden, Utah two years ago, we bought a house we could afford. We had a calculator and two brains, and knew how to use all three. Now WE are bailing out our Democratic neighbors in foreclosure with their Obama yardsigns while they drive not one, not two, but *three* SUV's and we get by with one vehicle (by choice). I've been Libertarian for years but I registered as Republican this year so I could vote in the primary, and I voted for McCain/Palin. Yes, I'd say, "Failed banks should fail"-- and failed journalists should fail, too.

Can you name one Libertarian Congressman or Senator responsible for making this happen?

I'm not sure if the libertarian view is being contrasted properly with the regulation view. In the regulation scenario, the regulators are assumed to have the wisdom granted by hindsight. It is like contrasting how we could have avoided a market crash if we had known what was going to cause it before hand. Even if one could perhaps pull out a regulator who foresaw the crisis, their are likely twelve more who foresaw ridiculous crises with ridiculous solutions.

Libertarianism should be given fair judgment. They should not be viewed against regulators that possess precognitive powers, but regulators as they are. Secondly, libertarians hold the position that markets will crash on their own. Well-regulated economies show just as much a tendency to slow down or crash as normal markets (see Europe and Japan's economic history).

If you want a simple Libertarian apology that makes sense, I'll give you one (though I am NOT a libertarian). A new economic tool came along (the derivatives Greenspan mentioned). As the only way to test something new in economics is to use it, people began buying and selling derivatives. They proved profitable and a booming business began to surround them. Then they turned out to have a few problems with them, a lesson that was taught to them quickly and painfully.

Just as regulators weren't certain about the need to regulate these factors, markets were not sure about how dangerous they were. Therefore, regulators didn't regulate and markets didn't properly account for the risk.

Since when did word become more important than actions? Sure, Reagan and Bush have talked about de-regulation and "Small Government," but they did NOT walk the talk. They did just the opposite. Can some one tell me what bill or bills repealed half as many pages of regulation as Sarbanes-Oxley added? Nope, cause it didn't happen. Can someone tell me when either Reagan or Bush even proposed, much less signed a budget that was even one penny less than the previous year???s budget, even after adjusting for inflation? No, you can???t, ???cause it never happened.
Weisberg dismisses arguments about the role of Democrats in pushing Fannie Mae & Freddie Mac to insure more and increasingly risky mortgages, but he offers no evidence to the contrary, even though Barney Frank is clearly on record pushing them to do more of just the stuff that got them into trouble.
It might be that a little regulation would be good, especially if it encouraged transparency. But we have a lot of regulation. It doesn???t encourage transparency in the areas it regulates, it muddies the waters. We have a long way to go towards real de-regulation before we go too far.
less signe

So if markets are "irrational, misunderstand risk and misallocate resources" you think government bureaucrats can show more wisdom? Are these guys making money on investments because of their greater understanding of the financial system or are they living on money taken from taxpayers and lobbyists? Are you sure you want the folks who put together the ethanol fiasco to run our financial system? The community reinvestment act and fannie mae and freddie mac are examples of politicians running our financial system. You want more of this?

Weisberg gets it all wrong. The question isn't the efficacy of free markets in maintaining stability, but the way that free markets punish poor decisions. Creative destruction is a vital part of a market economy. It's just as important that institutions fail as succeed from time to time.

The second error he makes is not holding regulation to the test of efficacy. Can regulators foresee what businessmen cannot? Do they have special powers? Hayek called this "The Fatal Conceit" -- the idea that the political class could possibly have enough knowledge to "regulate" the economy.

As usual, government action has created this crisis by distorting capital flows, and further government action will prolong the pain.

C-SPAN THIRD PARTY DEBATE

http://www.c-spanarchives.org/library/includes/templates/library/flash_popup.php?pID=281952-1&clipStart=&clipStop=

C-SPAN THIRD PARTY VP DEBATED NOVEMBER 2

C-SPAN THIRD PARTY DEBATE

http://www.c-spanarchives.org/library/includes/templates/library/flash_popup.php?pID=281952-1&clipStart=&clipStop=

C-SPAN THIRD PARTY VP DEBATED NOVEMBER 2

This article is purposely naive. Don't you dare blame this on the free market and Libertarians. Government circumvented what common sense would normally allow with their forced loans to people who couldn't pay those loans back. That and political correctness caused this. Your liberal leadership is all over YouTube saying that there was nothing wrong with Fannie and Freddie. Meeks, Waters, Franks, Shays etc look like complete *** and you want to blame this on Libertarians. It kills me how you liberals can make complete fools of yourselves with your ridiculous twisted logic. Do you really think the public are that ***' stupid?

I'm Greg Merle, Libertarian running for Congress. You guys suck and I approve this message.

This is real simple economics. How many full-time employees with benefits does a person with a $50,000 income personally employ? For most, none. How many does a person with $250,000 employ? One less under Obama's tax plan, two less if you include Obam's health plan.

For all you wannabe Repulican talkingheads here: hey man, I got a bridge to nowhere I wanna sell you. Do U believe everything you've said, or you're just plain S*&^%$d

Obama in this video is campaigning at a convention of Acorn and I believe two other Community Activist's organizations. Ask if he will be their ally if he becomes President and pledge to meet with leaders of Acorn and the others present at the convention in his first year, Obama says, quote:

"Yes, but let me say that before I even get inaugurated, during the transition, we are going to be calling all of you in to help us shape the agenda."

See and hear it for yourself. Obama has promised that Acorn and other groups like it will a part of his transition and setting his agenda if elected:

http://www.youtube.com/watch?v=8vJcVgJhNaU

See Barney Franks comments on the news, including face the nation last week, stating that Democrats in Congress intend to greatly raise taxes and go on a spending spree.

http://www.youtube.com/watch?v=u1Mazjm_A5k

http://www.youtube.com/watch?v=cJGnSAlqjoU

See http://www.taxfoundation.org/blog/show/23617.html


And again what was Frank saying at roughly the time McCains attempt at S.190. to fix Fannie and Freddie.

http://www.youtube.com/watch?v=_MGT_cSi7Rs

"These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis, the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

So who really is the liar that soaked the American people?

See also: http://www.cbsnews.com/stories/2007/01/08/politics/main2335631.shtml

In the exchange with "Joe the plumber" we found out that Obama really is as radical as his early political acquaintances, Davis, Ayers, Wright, etc., and that he is into the failed economic policy of wealth redistribution. Obama's tax and spending plans alone would be bad enough, but add Reid and Pelosi to the mix, with the three of them controlling both houses of Congress and the executive branch without any effective restraint, and you have something that should causes concern even among moderate Democrats.
See Wall Street Journal: A Liberal Supermajority:

http://online.wsj.com/article/SB122420205889842989.html

Their failed policies are what brought us to ruin. Even Bill Clinton says so. http://www.youtube.com/watch?v=XsynspIqAoE
Obama and a supermajority of Democrats simply is not the change we need, nor is it change we can afford.

Obama's programs require him to tax, and his health care plan alone is a substantial hidden tax on all business, large an small. In reality, it does not really matter who he taxes, those taxes are going to be passed through the economy. He has to tax, because it is they only way he can pay for his massive social engineering experiments. Any first year economics student knows that taxation is a tool used to contract an economy experiencing inflation, because it reduces demand by reducing the amount of money individuals and businesses have to spend. It is contractionary, which is exactly what you do not want to do when the problem is that the economy is contracting already into recession. Like Hoover and FDR, Obama's plans will only make it worse for longer.
See e.g. http://www.cbsnews.com/stories/2008/10/03/opinion/main4499465.shtml
And
http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx