I emphasize free market capitalism, to distinguish it from the cronyism and interventionism that has played so large a role in the current crisis: the Federal Reserve, bailouts, Government Sponsored Enterprises (Fannie Mae and Freddie Mac), the Community Reinvestment Act, and more. (As Don Boudreaux has pointed out, the penchant for blaming the problems on “greed” is the Great Chicago Fire on oxygen. Without it, nothing would burn, but it’s present around us whether things burn or not, so it’s better to look for the spark, which in this case is not greed, but institutions that channel it into wasteful avenues.)
A New Way to Celebrate Free Market Capitalism
3 Responses to “A New Way to Celebrate Free Market Capitalism”
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Very well put.
Yeah, I’m sure as heck glad that Cato isn’t endorisng the bailout. Oh… wait …
http://online.wsj.com/article/SB122390023840728367.html
“William Poole, former president of the Federal Reserve Bank of St. Louis, was a fierce critic of Treasury’s initial plan to buy up distressed mortgage-backed securities. Such a scheme, he said, would lead banks to dump their worst assets on the taxpayers.
“But Treasury’s new tack may well do the trick, said Mr. Poole, now a senior fellow at the free-market-oriented Cato Institute.
“‘Investors need to be confident that the banks they’re dealing with are unquestionably solvent, and it’s in the interest of banks to assure investors that that’s the case,’ he said. ‘One way banks can provide that assurance is to raise additional capital, in some combination of private and government capital.'”
Whatever that economist’s view is, what is quoted isn’t an endorsement of anything. What it is is a statement of what constitutes bank solvency, not an endorsement of a policy. And the same economist is quoted extensively attacking the bailouts in other media. You have misleadingly put a quotation mark around a sentence that is not a quote, but a part of the reporter’s article.