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.
Tag: Interventionism
John Stossel’s Politically Incorrect Guide to Politics
Be sure to view all four parts. It’s very good. Click here for part one.
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 front of the Capitol reflecting pool at the Grant Memorial.
“Big-government supporters are on the attack – the free market and our American way of life are the targets,” said AFP President Tim Phillips. “This rally is a call to arms for those who believe government is the problem, not a solution. The one-thousand citizens who will rally in front of the U.S. Capitol represent millions more Americans across the country who believe in free-market principles.”
Who: Americans for Prosperity
What: Rally to defend the free market, protest big government power grab
When: 2:30 p.m.; Friday, October 10
Where: Grant Memorial, in front of the Capitol reflecting poolEven as candidates and elected officials are busy blaming economic uncertainty on Wall Street “greed” and deregulation, the rally is part of AFP’s grassroots campaign to expose government policies that have ushered in market unrest and promote free-market solutions. The citizens participating in the Capitol Hill rally will also attend AFP Foundation’s October 10-11 Defending the American Dream Summit at the Marriott Crystal Gateway — the nation’s largest gathering of free-market conservatives committed to changing the policy landscape on issues such as taxes, spending, and unfettered markets. Americans for Prosperity is a co-sponsor of the Summit. Visit www.DefendingtheDream.org for a full agenda.
“We are standing together to send a powerful message that free markets and pro-growth economic policies deliver the American Dream,” Phillips concluded. “Class warfare attacks are camouflage for a far-left, big-government agenda that will shut down our economic engines. Our rally will send a compelling reminder to lawmakers of the belief in more limited government, low taxes, and less spending, shared by millions of Americans.”
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 price being paid now of ignoring manifest risk beneath the mortgage crisis, are we angry at bad decisions that must never be repeated, or just upset that it all blew up? Because if it’s the latter, politicians will try to game the system again to get more risk-free benefits.
Which is it?
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 believe that we did very well in the 1870 to 1914 period with an international gold standard.” It would be easy to dismiss this statement as a quaint relic from Mr. Greenspan’s earlier days as an Ayn Rand acolyte; his article on “Gold and Economic Freedom” appears in her 1966 compendium “Capitalism: The Unknown Ideal.” But Mr. Greenspan said it, rather emphatically, last October on the Fox Business Network. He was responding to the interviewer’s question: “Why do we need a central bank?”
Whatever well-intentioned reasons existed in 1913 for creating the Federal Reserve — to provide an elastic currency to soften the blow of economic contractions caused by “irrational exuberance” (and that will never be conquered, so long as humans have aspirations) — one would be hard-pressed to say that the financial fallout from this latest money meltdown will have less damaging consequences for the average person than would have been incurred under a gold standard.
Booted from White House Conference Call
My friend Leslie Carbone was Booted from White House Conference Call.
By the way, Leslie is the author of Slaying Leviathan: The Moral Case for Tax Reform, which will be published in May 2009. I can’t wait.
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 the political process to stifle competition from foreign firms, it has also taken advantage of the reduced competition by raising its price by more than 10 percent.
See Dry-Cleaning Economics in One Lesson for the whole story.
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.
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 or two ago?
It’s from 1997. See The Mounting Case for Privatizing Fannie Mae and Freddie Mac.