Thank you so much, Phil, for your response to the prevailing belief
among the general public that the current financial meltdown is the
result of lack of regulation. The "See, we need more regulation"
attitude is very much akin to the Katrina/FIMA mess which elicited a
"See, we need more government assistance." And I don't think we
libertarians (including me, and except for Ron Paul) are doing nearly
enough to correct the prevailing perception on either situations.
From: Philip Berg
Sent: Tuesday, September 23, 2008 2:40 AM
Subject: [lpsf-discuss] A libertarian friend wrote
To be relevant, libertarians will have to admit that the subprime
crisis was largely the product of private action. Privately issued
subprime mortgage securitizations were the first to deteriorate and
appear to have performed the worst overall. They were a defective
product sold by the financial industry to global institutional
investors hoping to earn a few extra basis points on their AAA
and my response...
The whole mess has nothing to do with free markets. The whole
market from top to bottom operated with two assumptions
Housing always goes up
If housing doesn't go up, then the Fed will make it go up by any
and a corellary axiom...
If the Fed fails, then we all go together, but at least I got mine.
and the whole bloody mess is created by the moral hazard of the
perceived Greenspan Put.
Fiat money, legal tender laws, central banking, and non existent
enforcement of common law crimes, all were the foundation of this
disaster. Libertarians have nothing to apologize for. Wthose who have
read any Rothbard or Mises ,or Hyak, or even Bill Bonner, saw this
coming from a mile and a decade away. We just never imagined that it
wouldget this bad on the upside or downside. Reasoning sound, timing
It is absolutely imperative that people learn that this is not a
fil! ure of f reedom but a failure of government and the fascist
business model. To give up the intellectual field now when we are
needed most would be tragic. There are so few of us, and the tides of
Socialism and National Socialism run fast and deep.
From government's public-relations perspective, fascism, national socialism, third way and public-private partnerships are things of beauty, more so than socialism and communism. With socialism and communism, there is no doubt in the minds of citizens that government is in charge and only government is calling the shots; therefore, government gets all credit or blame for any success and all failures. With fascism and other similar systems, government's propaganda machine can always blame all failures on somebody else (the private sector) and an insufficient amount of government control, regardless of the fact that government controls every aspect of our lives.
Though I agree 100% that government is the creator of the current and impending financial meltdown, it will be a hard sell convincing most people, especially "educated" San Franciscans, that government is responsible for the current financial disaster. For example, I sat through a "psychology" class at a local university, earlier today, and listened to a passionate Marxist "psychology" professor blame the current financial meltdown on capitalism and de-regulation of markets. With the sole exception of myself, the classroom erupted into a frantic, arm-waving mass of cheers when we were told Communist countries have stable economic systems that take care of all people, not only white businessmen. (The fact that I pay big bucks to listen to this claptrap breaks my heart and my bank account and forces me to question my sanity.)
All the best,