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The Mirage of the Mortgage Fix

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Tags Capital and Interest TheoryInterventionismPrivate Property

12/11/2007

The sea of inflationary credit is the core problem behind the falling dollar, the subprime crisis, the housing meltdown, not to mention the rise in the national debt and a thousand other problems. No one in Washington seems to understand the reason for the crisis, much less how to fix it. A good indication is President Bush's freeze on subprime mortgage rates. It is a classic case that provides serious lessons for all of us. It shows the political penchant for intervening in the market, the market response, and the further interventions that are called forth when the first round doesn't bring the utopia they imagine. Here is the great mortal threat that intervention poses to the economy: not the first round, not even the second round, but the relentless dynamic of political rescues that drive us further into the pit of state planning. FULL ARTICLE

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