An Open Letter to my Friends on the Left
On my web page, I have posted an open letter to my friends on the left that attempts to persuade them that the current financial mess is not the product of free markets but a whole variety of government intervention. I further attempt to persuade them that, for reasons they might share, solutions that bailout the lenders and ask for more regulations will be counter-productive. I hope this letter also serves as a kind of "one-stop shop" (a Wal-Mart Super Center perhaps?) for a variety of examples of the role government intervention played in generating this crisis. It's about 3000 words, covering a whole number of related positions I've heard these friends argue for in the last couple of weeks.
If you have additional ideas, let me know, as I am more than willing to update the letter to cover things I might have missed. Other feedback is welcome as well, either in the comments or by email.
Cross-posted at The Austrian Economists.
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Jonathan Dresner - 10/7/2008
he vicious retribution they would so justly recieve at the hands of investors and creditors in an anarchic paradise.
Let me be completely clear: this comment was satire, and not to be taken literally or as a suggested course of action.
Russell Hanneken - 9/29/2008
Well said. You might also mention the 1997 Taxpayer Relief Act. Russell Roberts thinks it also played a role by making housing a more attractive investment than it otherwise would have been, because capital gains of up to $500,000 were excluded from taxation if they came from the sale of a house.
Jonathan Dresner - 9/29/2008
Fundamentally, it's the government's fault that these financial institutions failed. The government set standards requiring certain levels of capitalization, without which these companies could have gone on leveraging their nonexistent assets forever. And the government-backed system of bankruptcy (and the monopolization of violence) protects CEOs and managers of failed institutions from the vicious retribution they would so justly recieve at the hands of investors and creditors in an anarchic paradise.
David T. Beito - 9/28/2008
It goes on my office door tomorrow. I might be worth emphasizing the military-industrial issue.
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