lol yeah. Is his couch comfortable? Maybe if I come back there I can get a free session. :P

(I swear doc, in the dream I was a giant carrot and there were all these like undead rabbits that were trying to eat me.)

Is no one else concerned that the financial sector is being nationalized? Just on the front page of teh NY Times right now:

This after multiple bailouts of unprecedented size. To those calling for more regulation, I point to Fannie and Freddie, the two most heavily regulated players in the arena, as two of the first to fall under complete governmental control. I estimate the funding spent so far at half a trillion dollars. All spent without a law being passed. Bureaucrats are the law, the same as the police are. You can mention that your rights were violated, but meanwhile your door and your head are still kicked in.

In Atlas Shrugged, the government had to take over the means of production one by one and they had to pass laws to do it. Today, all they have to do is take advantage of crises and take over the means of finance. If you want to build a factory, a house, stock your warehouse, you'll have to grovel to the government because the private sector will have been regulated out of existence. The government will back all of your mutual funds and the entire stock market. All prices will be tightly controlled. All wages will be controlled.

Failed mortgages are now domestic terrorism. We are seeing the War on Capitalism.

/blog

Bobman, keep in mind that this text builds greatly on "Human Action" (which is more academic/dry). I only read your first objection (and iirc that's handled in more detail in Human Action) as I'm watching footballgames I missed last weekend all day but I'll get to the post eventually. Love the work.

Amplify, yes I am worried, although I think it's a bit soon to get doomsday about it. Definitely a bad precedent though. I don't know enough to have an opinion as to the necessity.

the US is now a socialist state

unfortunately, I am only half-joking

Amp

As I believe I mentioned earlier in this thread (and you agreed with me!), the US government is regulating here too late. I believe our opinions may diverge from this point: The government should have stepped in when these mortgage companies, Wall Street & credit rating agencies started doing blatantly fraudulently things with sub-prime mortgages.

I don't know how nobody realized that giving somebody who makes $40,000/yr a $500,000 mortgage was a bad idea. More than that, I don't see why nobody stopped it. Finally, I don't see WHY SOMEBODY WOULD TAKE IT. Do you not realize that taking a house whose payments in 3 years will be more than your current gross income is monumentally stupid?

The greed and stupidity of these people has ****ed the world economy for months, if not years, to come. Worse than that, it all could have been stopped with intelligent regulation on mortgages... such as exist in Canada.

But, yes, I agree, the US government stepping in to take over those companies is massively bad, possibly approaching evil. As I heard or read somewhere (possibly in this thread) the only solution to the current crisis is to let house prices stabilize at whatever number the market will bear, suck up the massive losses, and carry on from there.

The high prices on houses were only caused by the "should be illegal" mortages anyway.

I think that train left the station at least a while ago.

Most people are stupid. They hear, "Hey! We can get a much bigger house than we thought!" and they don't think beyond that.

The US is a socialist state for certain meanings of the word.

But lets be realistic here: the US is the least socialist country of any in the world, at least the part of the world with functioning government.

That's why I have problems with minarchists. I'm convinced that any sort of government interference will always lead to government soaking up more and more "responsibilities" and will always spiral out of control.

The slippery slope argument always strikes me as sloppy, and mildly alarmist.

At least you looked at it from both sides. All I ever hear about the housing crisis is 'omg banks are evil for giving these bad loans to people!'

No one forced these people to buy a house that is clearly beyond their means, but when the **** hits the fan, they're all too quick to cry foul.

The banks are definitely at fault for doing something so financially stupid, and they should be punished for it. The stuff going on today keeps that from happening, though and makes it easier for the banks to do something like this in the future imo.

The banks don't need to be punished. Who cares if they're punished? They don't...

All the people that would get punished in the banks are never working in the financial industry again.

This needs to correct itself so the problems don't last for 5 years and drag the world in to a Depression.

Truthfully, I think it's the nature of people wanting more and more power.

What is the line again? "Absolute power corrupts absolutely."

The things governments around the world do also strike me as sloppy and highly alarming.

Of course people want more power. But giving somebody power doesn't make them more likely to want more... they already want it (or someone else does).

The argument clown is making is basically "we can't give them this acceptable amount of power, because they'll use that to get more". That's wrong - it's trying to predict the future, and put it in a bad light, in order to scare people away from the current act you disagree with.

Each action should be considered on its own... is this amount of power acceptable, yes or no? And if those people reach for more, that needs to be addressed separately.

The things individuals do that are not in government strike me as sloppy and highly alarming.

Better not let people exist, either.

The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. - Thomas Jefferson

The answer to 1984 is 1776. - Alex Jones

By punished I mean that they should have to take the medicine of their crappy financial mistakes and lose the money, not get it handed to them by the government.

I'm not even sure if I want to blame the banks if they had the out of government help in their plannings from the start.
Basically a small risk/high reward type of gamble.

I'm not sure exactly what it was that I agreed with but let's proceed.

It's ****ing brilliant if the government just bails you out. If it's a free market then you go out of business. Nothing wrong with that. People took them because what's the downside? You have no money and live in a crappy apartment, then you live in a nice house for a few years, then you have no money and live in a crappy apartment again. This is why the decision rests with the lender instead of the buyer.

You aren't going to get me to agree to do anything the way they do it in Canada short of moose hunting and beer laws.

Agree completely. This solution is the only way to handle it. Let the economy do whatever it wants to do and leave it alone.

I am completely against regulating private contracts. If I want to lend a guy $500,000, it's my decision. You have no right to tell me I can't do it. I also have no right to come crawling to you 5 years later to get you to put up the money for my stupid decision. I try really hard to be consistent with this stuff.

That's why bucky is suck a genius entrepreneur. "Scam artists" FTW

Amp: so to what degree should it be allowed for me to lie to you about my product? In an unregulated world, I'm pretty sure lying to investors about the state of your business is a dominant strategy, to the point that it eventually turns out like most people view politics - sure, candidate A lied to you, and now you know about it, but so what? All candidates lie, so you can't really choose one that doesn't.
If all businesses lie, you can't choose the one that's honest to invest in. But it's still worth the gamble because a lot of them are still profitable investments. So you end up with no one really knowing what's going on. I'm not sure that's the best idea for an economy either.

Stephen H, Your first question assumes that I am in the position of "allowing" other people to do stuff. I am not. I am also not in the position of deciding what is best for the economy. I am in the position of entering into voluntary contracts with people, not deciding what types of contracts other people should or should not enter.