Don’t Bail Them Out

Contrary to what the blogging heads say, there is nothing that makes this nationalization inevitable. If the government fails to nationalize Freddie and Fannie, the world as we know it will come to an end. Those who are saying so are trying to scare the population, the same as with every other major demand by the regime. It was the same with NAFTA, the WTO, the war on terror, the war on bird flu, the nationalization of airport security, and everything else, with one major difference: the effects of this bailout could turn a downturn into a full scale depression.

How to Avoid Another Depression

Most commentators think this takeover of Fannie and Freddie was the right thing to do: unfortunate, but necessary to prevent a financial crisis. This is all wrongheaded. It might delay a financial crisis, but it only makes the overall economic crisis even worse. History has well demonstrated that government intervention only lengthens the economic crisis and increases its overall cost. Given the extraordinary nature of interventions that have been taken so far and the precedents that have been set, we have all the makings of the next great depression.

Don’t do it

When I taught at Hillsdale College, I heard one of my colleagues (whose office was right next to mine, and our doors were open) listening to a student ask if he could take the class final early, because he wanted to go participate in a rally for newly-reelected President Bush. My colleague wearily asked, “Why do you support him? He’s not a conservative. Look at how much he increased spending during his first term, even non-defense spending.” Exacta-mundo, to quote the Head & Shoulders commercial. Just as Republican Richard Nixon took the U.S.

If housing, why not everything?

It is important that the government bail out Fannie and Freddie. The free enterprise system, with its private property rights, profit and loss system of incentives, and market prices that allow individuals to rationally plan, works just fine for all other goods and services: food, clothing, health care, etc. The one exception is housing. Here, greed and rampant capitalism reign supreme, causing vast harm to the populace. The only hope for the average person is government.They are there to help us.

Economics in One Lesson Is Still Relevant

I continue to be struck by the relevance of Henry Hazlitt’s Economics in One Lesson even though it was published over sixty years ago. The Mises Institute’s new edition, with an introduction by Walter Block, will make Hazlitt’s insights accessible to a new generation of students and readers. We have made much progress during the decades since Hazlitt first put pen to paper and applied Frederic Bastiat’s insights about “that which is seen, and that which is not seen” to a variety of issues.

Economic and Climate Models

In a recent post on the popular blog Marginal Revolution, a reader asked GMU professor Tyler Cowen whether his experience with economic models shed any insight on the promise or pitfalls of climate models. I think the question is brilliant, and (in my immodest opinion) far more interesting than the answer Cowen gave. In the present article I’ll attempt to give the question the fuller treatment I believe it deserves.

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