And I cannot help but smile when I see how closely the “standard form” for the US Executive.

I’ll use Iraq.

First the “mistake” – Glass-Steagel, WMD.

Next the delay, until the “mistake” cannot be denied credibly.

Next the admission, but within the context that “everybody made the same mistake”.

Next the refusal to reverse course, even though the “mistake” has been acknowledged.

Finally, the dumping of the mess onto a new Administration.

Never in his life has George W Bush cleared up his own messes. Why expect him to start now?

John

The case (at least as I see it) is very strong that the HEART of this credit crisis is that it took place outside of those regulations, from the mortgage originators to the credit markets themselves.

Just take one example: one of the stupidest gears that is broken right now is the paper trail of who actually owns the mortgage note, tying up courts and causing confusion. It wouldn’t have taken a strait jacket of regulation to create some oversight to the mortgage origination process.

meli

All I ask is that we try one or the other. Free markets, or government. The terrible hybrid leads both sides pointing at each other, and government always wins.

Lune, if most government policies make things worse, why would you want MORE government policies?

Take most of what the Fed is doing, and the treasury, and the SEC. They are slowly turning us into Japan, step by step making the same mistakes. They messed up while the crisis was building up, what makes you think they’ll do a better job this time?

They in fact were responsible for adding fuel to the fire! The ‘chief regulator’ Greenspan, proclaiming the wonders of ARMs when rates were at the their lowest ever, his infinite praise of derivatives and CDS’s as the great stabilizers, and of course his ever ready presence in bailing banks, thrifts, hedge funds, and the markets out on a consistent basis. Combine that with a total lack of persecution of fraud by the SEC, bogus ratings on toxic structured products due to an arcane government sponsored rating system, and the icing on the cake, the 100+ to 1 levered government sponsored hedge funds, excuse me, Fannie and Freddie, and it seems to me like government has it’s dirty paws all over the free market, and in fact, it’s interventions are the major cause of this disaster. All because some politicians in Washington thought an ‘ownership society’ was a good idea.

Rant over.

I linked to two articles, both of which give, one, a brief overview of Rothbard’s explanation of the depression, and two, a link to an essay as to what brought us out of the great depression.

The whole misnomer of the term free market is one of the main problems. Free markets simply mean the cooperation of human beings in voluntary exchange.

Anon @3:58: The whole idea that there can’t be a free market in anarchy and contracts are enforced only by the violence of the state is totally absurd. How do you explain black markets? Those operate away from the eye of the state, yet people exchange money for goods, and if the contract isn’t followed through, I will no longer conduct business with that person. I am often more pleased with my barter and black market deals than I am with your so called ‘only capable because of regulation purchases’. How do you explain that?

And people call me dogmatic.

Please don’t backtrack on your use of the word obvious. There are no ‘free markets’ in anarchy. Easily proven, yes. Obvious, yes as well, except to those who have a vested interest in disbelief. All commerce is enforced through actual violence or the ‘implied violence of the State’ that stands behind all regulation. In all but the most absurd circumstances, societies depend on regulation (including the most basic forms of selective contract enforcement) for any form of effective capitalism. The only way this is not obvious to anyone who has spent more than a minute debating it is by means of a desperate hope that the world is the way one wants it to be rather than the way that it is.

As for your last comment, that was just petty. If you are going to blog and respond to comments keep it on a high level.

That in itself should be strong evidence that these markets can only exist within a regulatory and supervisory framework. But I’d go further and argue that such “free markets” cannot exist without such a framework? Why? Well, take the stock market, that paragon of freedom. If you were a joe blow investor in Iowa, how do you have the confidence to buy stock in IBM (for example), having never met the pit trader in the NYSE who will execute your order, nor the CEO of IBM to personally verify IBM’s books, not knowing whether the NYSE will actually execute your order or take your money and run, and never receiving a stock certificate verifying your ownership? The short answer: govt regulation:
1) Regulations by the NYSE and SEC that assures the investor that the pit trader is qualified and executes orders according to very specific rules
2) SEC and FASB rules that require IBM to report standardized, accurate, and audited financial data
3) SEC rules that govern the NYSE and execution of orders
4) Supervision by DTCC and other clearing agencies to make sure that you indeed now own the shares you thought you bought, even though you never knew who the seller was.

Without those assurances, how many investors would engage in the type of arms-length trades that are the norm for public equities?

Indeed, the breakdown of CDO and other OTC markets has been exacerbated by counterparty risk and opaque contracts precisely because the lack of regulation and supervision of these transactions has created an unknowable “black hole” of information from which the smart investor is staying away from.

The purest example of a free market that exists right now is probably Darfur, Sudan. No government, no rules (that are enfored anyway). Do what you like, eat what you kill, and keep what you can defend. No dirty gubmint to get in the way. Last I checked, not many millionaires are being produced there, and there’s been no stampede of investors hoping to cash in on the ultimate free market.

Let me know if you need to simplify your life further. I’ll be happy to help