8pm at Bayou Bend (Westcott @ Memorial)
Gate opens 7:15
$25, $20 for students, seniors, and MFAH members
bring your lawn chairs and blankets
Month: September 2008
EconLog, The Case Against the Bailout, Arnold Kling: Library of Economics and Liberty:
1. Today’s economy differs from that of the 1930’s. Then, it may be that financial sector may have contributed to the downturn elsewhere. Today, the financial sector is the downturn.
2. The bailout blends finance with government. It is the Fannie Mae and Freddie Mac model, writ large. As we saw with Freddie and Fannie, when you blend finance with government, the firms have an incentive to manipulate the government and government has an incentive to meddle with the firms.
3. Trying to tweak the bailout to try to redistribute the pains and gains so that taxpayers come out better and shareholders/executives come out worse is beside the point. If you put lipstick on a pig, it’s still a pig.
4. The housing market is out of balance, in part due to excess home borrowing. Until it is in balance, no one will know what mortgage securities are worth. Attempts to prop up home borrowing, by freezing foreclosures for example, are counterproductive.
When you, Joe Citizen, spend frivolously and default on your loans, the bank takes your house. When the government spends your tax dollars frivolously, it simply cooks the books to cover its excesses. When the books are left in ashes, the government just takes more of your money, or it prints more money, leaving the money it hasn’t already taken from you devalued. Over the last few weeks, we’ve learned that you now face the prospect of an additional indignity: When your neighbor’s bank spends frivolously and defaults on its loans, the government’s going to take your money then too, to keep the bank in business.
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.
I’ll buy tickets for all the members of Congress. They don’t have to be there for the whole show; they could skip the entire first act, if need be (though they’d miss the great Act I finale). As long as they are there to hear the last verse of Lord Mountararat’s song “When Britain Really Ruled the Waves”:
And while the House of Peers withholds
Its legislative hand,
And noble statesmen do not itch
To interfere with matters which
They do not understand,
As bright will shine Great Britain’s rays
As in King George’s glorious days!
As bright will shine Great Britain’s rays
As in King George’s glorious days!
The Most Interesting Points Can Not Be Put In Your Footnotes!:
In the early ’30s, Mises reminded people that what they were living through was not the crisis of capitalism, but the crisis of the interventionist state. We are about to have another lesson in what Mises meant by that.