[ExI] Article From March on SubPrime

[Lee Corbin]

Dagon writes

> Lee wrote:
>
>> Fred writes about a March (!) 2008 article that very, very
>> clearly explains three ways that the federal government (
>> not it says, to be confused with the Fed reserve) contributed
>> to the current fiasco:
>>
>>> http://www.investors.com/editorial/editorialcontent.asp?secid=1502&status=article&id=291507506135021
>>
>>   To see how the government contributed to the subprime mess, we
>>   must look at the feds, not the Fed. The feds helped create the
>>   problem in three main ways.
>
> Controlling market mechanisms surrounding tulips is arguably
> frivolous. Using this as an example to make an ideological
> point is likewise.

I disagree. It's in the nature of analogy that responsible readers
and writers understand the limitations of an analogy employed.

> A government exerting control on crucial fundaments of financial markets, plus implementing law that do the same, and actually 
> enforcing them, with the purpose of protecting voters from market predation, exploitation, fluctuations, callous exclusion or 
> arbitrage is doing what a government is doing - creating the
> requirements for a civil society.

No, the government just destroys social capital, uses its
power to enforce its (often corrupt) decrees, all to "save
the people" from predation. You are very naïve if
you haven't heard that power corrupts. Society can
be civil just fine if the government limits itself to enforcing
contracts, attempting to guarantee the rule of law and
private property rights, and providing for a nation's defense.
The rest of the activity almost always destroys wealth
(though, naturally, they do get lucky now and then).

Of course, I understand that some people are not ready
for liberty. Some people, especially in certain primitive
parts of the world, require that strict social observances
be forced upon them by their leaders. But even in more
advanced nations, many too many people will not accept
the responsibility for their own well-being, and the well-
being of friends, neighbors, and family. People need
people---not impersonal bureaucratic forces.

> Just as we lock up pedophyles and rapists, we should
> lock up people that, by virtue of financial malpractice,

And who is going to decide that? "The Committee on
Uneconomic and Wasteful Practices"?  Can I be on the
committee? (Actually, I'm holding out for a spot on the
Committee for Public Safety.)  Have you heard of this
idea: we make some *laws*, carefully written down, and
then lock up only those who break the laws, as determined
by impartial unbiased judicial minds. Have you, for
example, ever thoroughly studied the Russian Revolution
or the French Revolution?  Do you think that those people
were not just as idealistic and highly motivated as you are?
Study those, and watch how things usually develop among
us mere human beings. Learn how Lenin and Staline wrote
massive tracts about, and were sincere believers, in social
progress and that great good would be obtained if certain
types of people could just be "locked up", e.g., financiers
and business people. Find out what became necessary if
they valued their own lives, and truly valued the visions that
they had seen.

> callous disinterest, betrayal of position or gross incompetence,

Politicians will love your ideas. Think of the power.
No, laws are better.

> cause the fundamental conditions for safe, civil life of people to
> be impaired, or destroyed. We lock up people for throwing
> large cement bricks on train rails.

A carefully crafted law was passed to that effect, that
was not so sweeping that you could be arrested for
possession of cement blocks within a mile of a railroad
track, or rumored intension of so doing.

> We should do the same if greedy sociopaths cause
> comparable damage to our financial systems and we
> should prevent these calamities from happening.

Indeed, there are some sociopaths there who have no
consciences, and provided the law allows it, will screw
everyone they can. So would you be for MRI testing
for sociopathology of all people at age 10?  (Me, I
would make it fashionable to go around with my
certified-non-sociopath lapel, ring, or bracelet, and
have the system entirely optional.)

Lee