Some investors have come to believe that, whatever mistake they make, they have a right to their profits, and the authorities will enforce it. The rescue of Bear Stearns, the two GSEs and AIG will only fuel this belief.
The continuous invention of new regulatory frauds undermines the gravity of real fraud, writes writes Pierre Lemieux. What we have seen since the beginning of the 21st century looks like a repeat of the witch-hunt of the 1980s.
No government can live up to its billing as a semi-divine problem solver. Government intervention is not an alternative to the market; it merely creates a different kind of market full of con men selling very sour lemons.