The Rescue Package Will Delay Recovery

It is true that the financial system must be rescued; it must be rescued from the institutions holding bad debt that are currently draining capital while waiting for a bailout and adding little in return. It is they that are preventing wealth-generating activities in the financial sector and the other parts of the economy. They must not be rescued, lest the debt overhang continue and delay recovery.

The Housing Bubble in 4 Easy Steps

1. The Federal Reserve cut interest rates to as low as 1% so that after inflation we had negative interest rates.

2. As a result, mortgage rates fell to an all time low.

3. Low rates caused borrowing and lending to explode, particularly in real estate. For example, commercial banks more than doubled the amount of real-estate loans they made.

Bailouts as Privilege

Note another thing that the bailouts represent: special privilege to particular market players to protect them from failure. This isolates these firms from the market forces, such that they remain afloat whether they do good or bad at satisfying consumer wants. Resources cannot be reallocated from what have been revealed as useless projects to more urgent ones, again, as determined by the consumers. The government is channeling the money into uneconomic uses.

Stop Worrying about the Election

The idea that freedom is simply a state of mind may sound trifling, especially when considering some of the unimaginable horrors faced by unfree peoples across the globe. But even political freedom cannot be had without a people who keep the spirit of freedom alive within themselves; and if they do, real freedom is often not far behind.

The Bailout Reader

The events taking place in the financial market illustrate the soundness of the Austrian theory of money, banking, and credit cycles. Mises.org is your source not only for analysis of these events but also the economic theory that helps explain what is happening and what to do about it. Spread a sound view of money and banking, as protection against the fallacies of “stabilization” and “reflation” and also to see what kind of reforms are essential now.

Bush the Socialist Destroyer

We can buckle down for a year-long recession and then get on the path to financial and economic soundness. Or we can set off a calamity that will last a decade or more, and perhaps even wreck civilization as we know it. That’s our choice. Bush, acting the part of the financial socialist, wants to take us down the second path.

Hatch’s “International IP Piracy Priority Watch List”

So America is not content to be the World’s supercop in military matters. It’s bad enough we extend our anti-trust and tax and drug laws extraterritorially. Senate Moves To Protect U.S. IP Overseas reports:

Senate Finance Committee Chairman Max Baucus (D-MT) and Sen. Orrin Hatch (R-Utah) introduced the International Intellectual Property Protection and Enforcement Act of 2008, legislation meant to crack down on the theft of U.S. intellectual property around the world.

Correction vs. Bailout

The market has been working for the last three years to correct for the housing bubble caused by the Federal Reserve. Government intervention over the last year has been an impediment to the correction process. In the absence of these interventions and the promise of even more, the correction process would be much further along and more resources would have been reallocated and the recovery process would already be well underway.

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