The Eternal Death of Libertarianism

Matt Welch | October 20, 2008

Writing in both Newsweek and Slate, Jacob "In Defense of Government" Weisberg blames the recent financial crisis on, then declares the official death of, libertarianism. Here's how it begins:

A source of mild entertainment amid the financial carnage has been watching libertarians scurry to explain how the financial crisis is the result of too much government intervention, not too little. One line of argument casts as villain the Community Reinvestment Act, which prevents banks from "redlining" minority neighborhoods as not creditworthy. Another theory blames Fannie Mae and Freddie Mac for subsidizing and securitizing mortgages with an implicit government guarantee. An alternate thesis is that past bailouts encouraged investors to behave recklessly in anticipation of a taxpayer rescue. But libertarian apologists fall wildly short of providing any convincing explanation for what went wrong.

Needless to say, this is the last time in the piece that the subjects of Fannie Mae, Freddie Mac, and moral hazard are so much as mentioned. Why? Because Weisberg, despite his world-weary, just-the-facts shtick ("as with any failure, inquest is central to improvement"), has a political need to pin the whole blame for the would-be Great Depression 2.0 on "libertarian ideas." And nothing says "unlibertarian ideas" more than Washington bailouts and the mother of all subprime lenders.

Other subjects absent from Weisberg's self-described "forensic work": The Sarbanes-Oxley Act (which, you know, regulated financial markets, and had some impact on current events), and the thesis-harshing fact that the Bush administration has increased regulatory spending by more than 60 percent in real terms.

Weisberg continues:

Utopians of the right, libertarians are just as convinced [as Marxists were after the fall of communism] that their ideas have yet to be tried, and that they would work beautifully if we could only just have a do-over of human history. Like all true ideologues, they find a way to interpret mounting evidence of error as proof that they were right all along. [...]

The best thing you can say about libertarians is that because their views derive from abstract theory, they tend to be highly principled and rigorous in their logic. Those outside of government at places like the Cato Institute and Reason magazine are just as consistent in their opposition to government bailouts as to the kind of regulation that might have prevented one from being necessary. "Let failed banks fail" is the purist line. This approach would deliver a wonderful lesson in personal responsibility, creating thousands of new jobs in the soup-kitchen and food-pantry industries.

The worst thing you can say about libertarians is that they are intellectually immature, frozen in the worldview many of them absorbed from reading Ayn Rand novels in high school.

There is no space in Weisberg's conception of "libertarians" for people like, for instance, me: Not remotely a utopian, not "of the right," never read an Ayn Rand novel, spent high school playing sports instead of reading political philosophy, don't want to do history over (except for Game 5 of the 1986 ALCS), and don't pine for some presumably awful world where everyone shares my political views. (And, I might add, unlike Weisberg, I don't want to convert my political views into increased state power over fellow citizens who don't happen to agree with me.)

No, I just think that, all things being equal, capitalism is vastly superior to socialism, government is by definition inefficient, and would be much better off focused on essential tasks, rather than, say, nationalizing hundred-billion-dollar chunks of the mortgage industry, or trying to guarantee that asset prices never depreciate. In my world, at least, not all regulation is automatically evil, just ripe for being gamed by the very interests being regulated, and so better when pruned back.

In fact, reason has consistently called for more, not less, regulation of Fannie Mae and Freddie Mac. It certainly wasn't Slate who in February 2004 was sounding the warning gong against the "often unmonitored use" of derivative financial instruments "by government sponsored agencies." A snippet from that Gene Callahan and Greg Kaza article in reason:

While there has been increased legal and social pressure on private corporations to be transparent in their use of derivatives, politicians have shown little interest in similar standards for government derivatives trading.

Some of the biggest users of derivatives are government-sponsored enterprises (GSEs) such as the mortgage-lending institutions Fannie Mae, Ginnie Mae, and Freddie Mac. Doug Noland of PrudentBear.com, a site that advises investors from a bearish perspective, notes, "We have Fannie Mae, Freddie Mac, and the Federal Home Loan Bank system with total holdings [of derivatives] approaching $2.2 trillion and guarantees for another $1.5 trillion of securities."

This year, FM Watch, a coalition of financial service and housing-related organizations dedicated to monitoring GSEs, reported: "One of the GSEs was able to make its RBC [risk-based capital] virtually disappear through use of derivatives and other risk-hedging devices." FM Watch recommends that GSEs' "disclosures should be at least as complete as those provided by other publicly-traded companies and issuers."

The lack of transparency in governmental derivatives trading has resulted in the loss of billions of tax dollars in a string of mishaps spanning a decade.

As reason columnist Veronique de Rugy and Philippe Lacoude recently put it,

[A] critical mistake was made by allowing financial institutions such as Freddie Mac, Fannie Mae, and investment banks to hold significantly smaller capital ratios than commercial banks, while implicitly guaranteeing certain banks' losses.

Weisberg's beef with libertarians stretches back from even before the speculative capital-fueled Internet boom helped create his current job (along with the charity of a man whose wealth Weisberg finds downright immoral). No doubt he, like Thomas Frank and everyone named Naomi (not to mention their ideological cousins on the neoconservative side of the aisle), wants to use a second blip in a quarter century of consistent growth and worldwide poverty-reduction as an excuse to pretend that capitalism is fundamentally flawed, or that libertarians ever had anything to do with George W. Bush.

Is this the New Regime getting ready to round up the first ideological suspects against the wall? I'd suggest something far more comical. There's something almost poignant about the bland Process Liberal center-left, with a financial crisis in its quiver and a super-majority wind at its back, still feeling wobbly enough to attack a set of ideas that are marginal at best to the two-party debate. Why, it's almost as if Weisberg's not confident that Americans will join him in Defending Government!

Comments

kinnath|10.20.08 @ 5:08PM|#

About time, I've been waiting all day for this. Now I have to go home.

hotsauce|10.20.08 @ 5:09PM|#

Waste of breath, Matt. I read the calls on other threads for a response. I humbly sumbit this one was too idiotic to deserve one; on par, perhaps, with arguing about the existence of invisible winged angels who visit earth.

|10.20.08 @ 5:09PM|#

Weisberg has absolutely no idea what caused the crash, yet he's completely confident that Philosophy X is to blame.

fyodor|10.20.08 @ 5:12PM|#

Weisberg, shmeisberg. This is what we're up against, this is the popular narrative. It's not the death of libertarianism, but don't get your hopes up for making any mainstream inroads for a little while....

|10.20.08 @ 5:17PM|#

There is no space in Weisberg's conception of "libertarians" for people like, for instance, me: Not remotely a utopian, not "of the right," never read an Ayn Rand novel, spent high school playing sports instead of reading political philosophy, don't want to do history over (except for Game 5 of the 1986 ALCS), and don't pine for some presumably awful world where everyone shares my political views.

OK That's it Welch! Turn in your decoder ring.

Mike Laursen|10.20.08 @ 5:17PM|#

To which the rest of us can only respond, Haven't you people done enough harm already?

Give him hell, Welch! I get that purist, ideologue libertarians are just like purist, ideologue communists, whining about how their way has never really been tried. But, like you, I ain't a purist, idealogue libertarian, and yet nobody I have ever voted for in nearly thirty years of voting has ever been elected. You really, really cannot blame us.

|10.20.08 @ 5:19PM|#

Rant-tastic, Matt. I can't even pick out a favorite bit.

I would quibble a bit with this:

Is this the New Regime getting ready to round up the first ideological suspects against the wall? I'd suggest something far more comical. There's something almost poignant about the bland Process Liberal center-left, with a financial crisis in its quiver and a super-majority wind at its back, still feeling wobbly enough to attack a set of ideas that are marginal at best to the two-party debate.

What Weisberg and the rest of the Total Statists are doing is Making an Example of the skinny kid on the block, pour enourager les autres who might have the nerve to question some aspect of their New New Deal.

|10.20.08 @ 5:24PM|#

Libertarians have the benefit and the problem of being ineffectual as a political party but influential, at least in rhetoric, as a party of ideas. To the extent that the deregulation of the financial instruments that have been fingered (ew!) in this crisis is linked to "free markets good, government regulation bad" ideas libertarians are going to get some of that attack. You can say the de-regulators didn't "really" do a good job or even a "de-regulation" at all, but it sure was sold as that at the time.

|10.20.08 @ 5:24PM|#

I think the bailout was sized based on $1 for every time "deregulation" was blamed for the crash.

|10.20.08 @ 5:26PM|#

C'mon Matt, you know how these petty and unimaginitive useful idiots work: You throw a dart and you blame whomever's wedge it lands in. No need for pesky facts to get in the way of the narrative! Just slander up and go!

Maybe Jack Shafer can punch him once in the dick for us, if he passes him in the hall at Slate HQ.

Alan Vanneman|10.20.08 @ 5:26PM|#

I assume the length of this piece is a reaction to the exposure of Weisberg's piece rather its content. Weisberg simply knows nothing about libertarianism--they're just "the bad guys." You can't refute someone who doesn't know what he's talking about.

|10.20.08 @ 5:27PM|#

I enjoy the argument that the democrats (see: government) tried to save us from this crisis, but the republicans (see: government) got in the way so therefore it's the people who have never held any significant political office's fault that we're in this mess.

|10.20.08 @ 5:29PM|#

You can say the de-regulators didn't "really" do a good job or even a "de-regulation" at all, but it sure was sold as that at the time.

Can anyone link to a legitimate source that lists what, exactly, in this whole mess that was "deregulated?" This term keeps getting thrown around and some factual context would be nice.

|10.20.08 @ 5:30PM|#

Anyone have the feeling that the Left is trying to use the economic situation to discredit the libertarians now so no one will listen to the libertarian arguments against the coming-up-fast federal bans on smoking, drinking, eating, and generally merriment?

|10.20.08 @ 5:31PM|#

One line of argument casts as villain the Community Reinvestment Act, which prevents banks from "redlining" minority neighborhoods as not creditworthy. Another theory blames Fannie Mae and Freddie Mac for subsidizing and securitizing mortgages with an implicit government guarantee. An alternate thesis is that past bailouts encouraged investors to behave recklessly in anticipation of a taxpayer rescue.

Does Weisberg actually go on to explain how any of this is inaccurate? Or does he merely assume that Slate readers have already consumed the appropriate amount of Government Cheese?

Kyle|10.20.08 @ 5:31PM|#

I wonder how long Weisberg spent writing this article?

Maybe he asked some girl in a bar which party she belonged to as a pickup line, and she jokingly responded "Libertarian" as she refused his drink offer.

Chris|10.20.08 @ 5:31PM|#

The phrase "intellectually immature" is a vague and objectively meaningless statement intended to judge without addressing any specific, measurable criteria.

I'm fairly certain THAT is the definition of "intellectually immature."

|10.20.08 @ 5:36PM|#

JW
http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

|10.20.08 @ 5:36PM|#

I'll answer my own questions after perusing the article: No, he does not.

Weisberg spends exactly a single paragraph talking about the failure of Long-Term Capital Management in the '90s as being a sign that capital markets should have been regulated. But he does nothing to refute the cause of the housing bubble that led to the current problem.

Regulation of capital markets can a difficult issue for libertarians, simply because the government has been involved from day one in setting the whole system up. But for Weisberg to assume that government regulation will not lead to crashes and panics requires, well, something akin to religious faith in the power of bureaucrats. He's entitled to that, but I don't have to take him seriously.

|10.20.08 @ 5:39PM|#

I'd love to hear Weisberg stutter when asked to explain--provide nothing less than a step-by-step explanation--how derivatives are responsible for the credit crisis.

Gilbert Martin|10.20.08 @ 5:40PM|#

Does Weisburg mention anything about the role of the federal reserve in creating the asset bubble in real estate?

|10.20.08 @ 5:40PM|#

What do people think caused the problems?

Andy|10.20.08 @ 5:41PM|#

Someday, someone somewhere will create actual libertarianism. Probably not before "real" Marxism, but someday.

TallDave|10.20.08 @ 5:42PM|#

Thank God someone addressed this rectocranial adornment.

Fannie and Freddie collapsed because of government intervention, not despite it.

We need LESS socialism, not more. Hopefully Americans will figure this out in the next couple weeks.

|10.20.08 @ 5:43PM|#

MNG--That's it? How did this cause the rest of the world's banking sectors to similarly unravel then?

Seriously, what, exactly, was "deregulated?"

The Government Is Infallible|10.20.08 @ 5:44PM|#

something akin to religious faith in the power of bureaucrats.

And thus was born the Bureaupapacy and its Ten Trillion Commandments.

Mike Laursen|10.20.08 @ 5:44PM|#

Can anyone link to a legitimate source that lists what, exactly, in this whole mess that was "deregulated?" This term keeps getting thrown around and some factual context would be nice.

I don't have any specific sources at hand, but my impression is that any time you hear the word, "deregulated", you have to translate it to mean either "regulation was weakened" or something that should have been subjected to new regulation wasn't. Thus, when the capital reserve requirements were reduced for the Wall Street financial banks, that was "deregulation" even though they were still regulated. And the failure to set up a public exchange for derivatives was also "deregulation".

|10.20.08 @ 5:46PM|#

Utopians of the right, libertarians are just as convinced [as Marxists were after the fall of communism] that their ideas have yet to be tried

I wonder what Weisburg would say if you pleasantly informed him that libertarianism isn't "an idea to be imposed" on people. It's the exact opposite of imposition.

|10.20.08 @ 5:47PM|#

While I don't encourage ayn rand worship. It does make sense to read one or two of her books... Anthem is short, it takes a couple hours.

or how about 10 minutes on youtube for some good atlas shrugged quotes?

http://www.youtube.com/watch?v=Wpo3OoyUUUc

what about "economics in one lesson" by henry hazlitt?

"libertarian Manifesto"...at least the chapter on war and foreign policy...by Murray Rothbard....even if you hate these people and libertarianism it does make sense to read it ....kinda like Marx or Mein kampf or John kenneth Galbreath or Keynes.

|10.20.08 @ 5:47PM|#

I went to MNG's wiki link and strangely, I didn't find a single libertarian vote to repeal Glass-Steagle. I did find, however, large numbers of Democrat and Republican votes. Funny, that.

Does Weisberg know this or did he just conveniently forget to mention that tidbit?

SIV|10.20.08 @ 5:48PM|#

I blame the State and Central banking.
They are both fragile institutions(in any sense they are separable) and they create these kind of messes as a result of trying to maintain power and control.

I do kind of appreciate being blamed.Makes me feel important!
I will thus confess my crimes:

I once voted for Phil Graham in a Presidential Primary.
I often vote for libertarian candidates.
I own a CATO Institute coffee mug (gift from my Marxist ex-gf)
I engage in reckless saving behavior.I save beyond my means thus stifling the economy.
I "supported" the Reason Foundation by filling out the blow-in subscription cards for the magazine with fake names,checking the "bill me later" box and never paying the invoice to the fictitious person. I withdrew my "support" when Virginia Postrel ceased to edit the magazine.

What Just Happened?|10.20.08 @ 5:48PM|#

Seriously, what, exactly, was "deregulated?"

Watch and learn.

This was not a libertarian-inspired deregulation. It was done in the name of social justice.

|10.20.08 @ 5:51PM|#

Funny Weisberg never mentions the low interest rates set by the Fed nor the homeowners tax deduction (a huge gov't subsidy) as a possible cause of people unwisely investing in over-priced real estate.

I'm the first to admit that capitalism not perfect. In fact, its day-to-day operation can be extremely "cruel" at times, but the unfortunate fact remains that there is nothing better.

Mike Laursen|10.20.08 @ 5:52PM|#

What do people think caused the problems?

A combination of:
* Inflationary monetary policy
* Fannie Mae and Freddie Mac assuming and centralizing the risk for bad mortgages
* Relaxation of financial bank reserve requirements
* Credit ratings agencies not doing their job
* Clever investment schemes, and dumb people who bought them
* The bailout, seen as the obvious thing to do by crony capitalists who aren't familiar with the world outside Wall Street, and don't give a shit about the taxpayer or the effects of national debt.
* Dumbshit political and financial pundits
* Overreaction to indicators like the DJI.

|10.20.08 @ 5:54PM|#

I wonder what Weisburg would say if you pleasantly informed him that libertarianism isn't "an idea to be imposed" on people. It's the exact opposite of imposition.

Being a liberal, he'd say something like, "Try explaining that to a poor starving child."

|10.20.08 @ 5:54PM|#

We suffer the Eternal Death of Libertarianism, Matt, because libertarianism is, indeed, eternally dying.

I recall a discussion, very sober, with a libertarian friend back in the early 70s, when we were both in high school. Looking out at the vast landscape of regulation and taxation we faced (what in retrospect was a virtual minimal state), my friend noted, "Most people are so stupid as to not see any problem with this. They deserve the government they get." I noted then, and it is true today, "Sadly, we also get the government they deserve..."

|10.20.08 @ 5:56PM|#

Watch and learn.

Yes, yes, this is all well established. Our federal guvmint is very well intentioned and also simultaneously incompetent.

I would sincerely love to know what was "deregulated."

|10.20.08 @ 5:57PM|#

JW
You should really try to seriously engage folks that disagree with you seeing as how they are a majority and this is a democracy.

The act made possible several things that hitherto were prevented or limited to a greater degree: "opening up competition among banks, securities companies and insurance companies"; "allowed commercial and investment banks to consolidate;" etc. That's de-regulation to the extent that it is "less" regulations.

nonPaulogist|10.20.08 @ 5:59PM|#

I quit reading Slate after they replaced The Armchair Economist Steven Landsburg with some lefty hack.

Slate was always a money-losing pet project of a billionaire kind of like....Reason.

|10.20.08 @ 5:59PM|#

"I wonder what Weisburg would say if you pleasantly informed him that libertarianism isn't "an idea to be imposed" on people."

TAO
I'm a big strong guy. I think I should be able to just whup on smaller dudes and take from them what I want. Libertarianism as an idea would not impose anything on me?

|10.20.08 @ 5:59PM|#

Part of the propblem is that people like Weisberg think that if only we regulated more that crises like this wouldn't happen.

What they generally fail to understand is that, like the space shuttle, the engineers can never anticipate everything that will go wrong in a vastly complex system, and attempting to do so merely creates inefficiencies. The result, for the space industry is that the system trends towards a situation where nothing can go wrong, because nothing goes at all. You get multi-billion dollar cost overruns and repeated delays, so that hardly any project ever gets completed (see the space station). Economically, this same effect translates to the gridlock that characterized socialist economies.

By the time something DOES go wrong anyway, because the regulators/safety people aren't omniscient, it's too late to regulate. Nobody will try the same thing again, anyhow. Unless of course you bail them out so they don't suffer the consequences.

The major problem with the "free markets caused this" thesis is that in order to let the free market work, you have to allow for the correction, which we aren't doing. The feedback loop is an essential element of the free market. It's the entire point of why markets work - negative feedback. Of course markets produce bubbles. Of course banks will make bad loans and go bankrupt sometimes. Free market advocates make absolutely no claims that they won't. What we do claim is that if you let the businesses fail that such things will tend not to happen again. Business failures are not market failures. Failure is how inefficiency gets punished. Recessions are not market failures. Recessions are necessary restructurings.

This is exactly the same mindset that leads to the belief that asset prices should never depreciate. Downturns are always bad. Bank failures are necessarily a problem.

A more useful point to address is the "too big to fail" argument. The left actually has a good opportuntiy here to argue for anti-trust on the grounds that company size can be a threat to stability. But instead they are too busy using the bailout as an excuse to argue for nationalizing everything.

But then, they always opt for centralization over decentralization, so I'm hardly surprsed.

the innominate one|10.20.08 @ 5:59PM|#

WaPo seems to place the blame on regulators not being permitted to place restrictions on the derivatives market and companies with derivatives having an unfavorable derivative to asset ratio, thus leaving themselves overexposed during downturns in the market. However, IANAE.

Mike Laursen|10.20.08 @ 6:00PM|#

Anyone have the feeling that the Left is trying to use the economic situation to discredit the libertarians now so no one will listen to the libertarian arguments against the coming-up-fast federal bans on smoking, drinking, eating, and generally merriment?

Well, no. They would like to discredit future libertarian arguments for privatizing Social Security, free international trade, and other economic matters. Many liberals actually see eye to eye with libertarians about drinking, eating, and merriment bans (except smoking, which they do consider evil).

|10.20.08 @ 6:01PM|#

TAO

I'm a person that thinks the concept of "private property" is silly. Therefore I think I can crash on anyone's property whenever. Libertarianism as an idea is not going to impose anything on me?

the innominate one|10.20.08 @ 6:03PM|#

MNG - libertarianism won't impose anything on you in that scenario that current laws don't already impose on you

libertarianism only imposes on you responsibility for yourself (i.e. not relying on the government to bail you out)

JP|10.20.08 @ 6:05PM|#

We suffer the Eternal Death of Libertarianism, Matt, because libertarianism is, indeed, eternally dying.

I can't argue with this. I will therefore go cry in several beers.

|10.20.08 @ 6:05PM|#

ML,

If those are the only causes of the credit crisis then it should be easy for the new administration to come up with a few regulations to prevent it from ever happening again.

|10.20.08 @ 6:05PM|#

"libertarianism won't impose anything on you in that scenario that current laws don't already impose on you"

IO-I've never read definitions of libertarianism that say it's the "not adding of any laws to the books from this moment on"

TAO
I'm a guy who, when I make promises, thinks that I have no need to later abide by them. Libertarianism wouldn't impose anything on me?

|10.20.08 @ 6:06PM|#

I find Laursen's list to be reasonable, because it recognizes the failure of government and private market actors.

|10.20.08 @ 6:08PM|#

What do people think caused the problems?

Witches. Libertarian witches who cast a spell on the Clinton(D) and Bush(R) administrations, making them completely ignore the home lending business.

Mike Laursen|10.20.08 @ 6:10PM|#

If those are the only causes of the credit crisis then it should be easy for the new administration to come up with a few regulations to prevent it from ever happening again.

Of the factors I listed, one could be fixed with a few regulations. Three could be fixed by having the government stop interfering in the free market. And four would require curing human stupidity.

|10.20.08 @ 6:13PM|#

You should really try to seriously engage folks that disagree with you seeing as how they are a majority and this is a democracy.

I am engaging you, and everyone for that matter, by asking a very simple question: What was deregulated? "Deregualtion" is the left's whipping boy for the bailout, so I see this as a legitimate question. Deregualtion is a specific term with a specific meaning, therefore, it should be able to list what things were deregulated.

Gramm-Leachy couldn't have created this problem in Europe nor Asia. There may have been similar environments in these markets, but clearly, we could not have single-handedly caused their financial meltdowns, unless Iceland put all their investments in Wachovia.

The act made possible several things that hitherto were prevented or limited to a greater degree: "opening up competition among banks, securities companies and insurance companies"; "allowed commercial and investment banks to consolidate;" etc. That's de-regulation to the extent that it is "less" regulations.

Yes, again, well established. That alone, however, does not explain *how* we got into this mess.

|10.20.08 @ 6:14PM|#

My point being that when it comes to things libertarians value, i.e., private property, contract enforcement, etc., they certainly don't seem to mind having a state engage in the theft of my money to buy blue uniforms, black judges robes, guns and gavels and then use, yes, coercion to make sure those values are protected. I mean, you've made me a slave when you do that, you socialists!

Stop being so sanctimonious, we've all sinned and fallen short of the glory of God (or the market, whatever alter bends yoour knee).

the innominate one|10.20.08 @ 6:15PM|#

MNG - I can't recall you being this dumb before. Is someone else posting as MNG?

|10.20.08 @ 6:16PM|#

JW
Do you not see two questions in your last post?
What was de-regulated and how did that cause this mess?

I answered the first, right?

|10.20.08 @ 6:18PM|#

IO
That's funny, because I distinctly recall you being this dumb ;).

I mean really, if you disagree point it out.

|10.20.08 @ 6:20PM|#

JW

Another:
http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000

the innominate one|10.20.08 @ 6:21PM|#

IO-I've never read definitions of libertarianism that say it's the "not adding of any laws to the books from this moment on"

I didn't say that was the definition of libertarianism. I will say your hypotheticals smack of not knowing the essentials of libertarianism, which surprises me, considering how long you've been coming to Hit and Run.

Tell me, what do you think the essentials of libertarianism are?

|10.20.08 @ 6:23PM|#

I answered the first, right?

Not really. I looked very carefully at the wiki page on G-L-B and found lots and lots of regulations as to the operations of financial institutions. So, it's hard to define a law that altered the structure of a market, but yet maintained many of the original regulations, as "deregulated." It clearly isn't "unregulated."

It certainly doesn't go with Weisberg's narrative as how it's all the libertarian's fault.

|10.20.08 @ 6:24PM|#

My neighbor grosses about $6K/month and took a mortgage loan for $4.8K/month. Can I add him to your list? Nobody wants to blame him though because he is a teacher and is trying to cure human stupidity.

|10.20.08 @ 6:24PM|#

MNG is in one of "those" moods again today, I see. Anybody trying to have a serious conversation with him is going to be sorely disappointed.

the innominate one|10.20.08 @ 6:26PM|#

TAO - feel free to get Te and Ching and pitch in.

|10.20.08 @ 6:27PM|#

I'm not supporting Weisberg's article, and Matt's analysis has many good points, but I wish he would stop using "quantity of regulations spending" as an appropriate metric for the current administration. In something as complicated as global trade in MBS instruments, it's got to be about specifics, about specific regulations, not about whether there are 1 or 2 metric fuck-tonnes of them. Details matter.

Just because the government has a fuck-tonne of bad regulations doesn't mean that all of them are bad, or even that there aren't regulations yet to be written that would be useful.

|10.20.08 @ 6:27PM|#

I enjoy the argument that the democrats (see: government) tried to save us from this crisis, but the republicans (see: government) got in the way so therefore it's the people who have never held any significant political office's fault that we're in this mess.

libertarians are the new Jews....we hold no real power but we are in there whispering poison into the ears of our leaders, mucking things up and violating their women with our unpure blood!

|10.20.08 @ 6:30PM|#

http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000

"This act was incorporated by reference into H.R. 4577, an omnibus spending bill. It was passed by the 106th United States Congress and signed by President Bill Clinton on December 21, 2000; the legislation thus became law as a part of H.R. 4577 - Public Law 106-554, §1(a)(5)."

Yet another unlibertarian law, enacted by what I would call unlibertarian means, voted on by not a single libertarian and signed into law by someone, not a libertarian.

Hmmm....(yes, I know it's not your meme.)

The Commodity Futures Modernization Act of 2000 has received criticism for the so-called "Enron loophole," 7 U.S.C. §2(h)(3) and (g), which exempts most over-the-counter energy trades and trading on electronic energy commodity markets. The "loophole" was drafted by lobbyists for Enron working with senator Phil Gramm[3] seeking a deregulated atmosphere for their new experiment, "Enron On-line."[4]

The act specifically banned regulation of credit default swaps. These unregulated instruments, insurance policies against default on risky investments like Mortgage Backed Securities (MBS), necessitated the government bailout of insurer A.I.G.[1]

Nope, still not seeing it.

|10.20.08 @ 6:31PM|#

I think my points have been quite clear, but I can re-make them:

IO and TAO
It would probably be impossible to give a definitive definition of libertarianism, but the values of contract enforcement, protection of private property and bodily autonomy are pretty widely shared ones by libertarians. And my point is that most libertarians are fine with some state mechanism to do these things, and I point out these state mechanisms ultimately use coercion on those who violate these values. That's an imposition.

JW
The bill "allowed" things that were previously not allowed by statute or regulations. When people allow or premit things hitherto prevented by such it's usually called de-regulation. The proponents of the bill surely called it this.

SIV|10.20.08 @ 6:34PM|#

MNG - I can't recall you being this dumb before.

New here? Welcome.

the innominate one|10.20.08 @ 6:36PM|#

coercion to protect individual's freedom, safety and property; to prevent what most agree is unacceptable forms of interpersonal coercion (see: nonaggression principle), yes, that is part of both libertarianism and the current system

|10.20.08 @ 6:38PM|#

JW

Let's make sure we are not talking past each other. I said that as a political party libertarians are ineffectual and therefore in that sense to blame them for any policy results is stupid. But they are influential as a party of ideas, and to the extent those ideas seem to be "less government good" and to the extent that people associate this crisis as the result of acts sold on that rhetoric they are going to be blamed.

Now for some reason you keep floating several different things at me:
1. Can libertarian politicians be blamed for the crisis?
2. Can any act related to this crisis be de-regulation?

To which I answer:
No. Yes.

MattXIV|10.20.08 @ 6:39PM|#

MNG,

What mechanism do you propose that Gramm-Leach-Biley contributed by? It may actually have blunted the extent of the crisis - mergers of insurance and banking companies result in a bigger combined amount of liquidity to absorb losses without going bankrupt. Diversified lines of business are an advantage in a credit crunch - GE has been able to maintain a AAA bond rating despite taking a huge hit to GE Capital because of it's other divisions.

|10.20.08 @ 6:41PM|#

IO
Ok, see, we are on the same page in a way. Libertarians are all for coercion, even state coercion, and all for state theft to fund it, it's just that you argue that the forms of this you support actually protect an individual's life and property.

So let's not have silly people saying that what differentiates libertarians and those who disagree is that the former believes in not imposing anything on anyone, or forcing anyone to do anything, and the latter does.

Of course, those of us who support coercion for things that you might not think it protects important values too.

|10.20.08 @ 6:44PM|#

"The act specifically banned regulation of credit default swaps."

The 2000 act prohibited regulatory agencies from creating and applying regulations to these instruments. That's de-regulation in most folks minds.

the innominate one|10.20.08 @ 6:47PM|#

I don't purport to speak for all libertarians, MNG.

I am certain anarcho-capitalists have a different take on things with regard to police, etc.

There are legitimate uses for coercion, though. Only absolute pacifists would disagree.

|10.20.08 @ 6:48PM|#

Do you not see two questions in your last post?
What was de-regulated and how did that cause this mess?

Of course I did. Granted, I intially asked for a list of what was deregulated that caused the financial meltdown. Of course, anything could be listed as the cause, so I amend this with: What was deregulated and how did this contribute the current situation?

The bill "allowed" things that were previously not allowed by statute or regulations.

That's a pretty broad definition. By that definition, raising the number of allowed harp seal cubs that could be killed from 3 to 5 annually could be called deregulation. Allowing cabs to charge $1 more during rush hour is deregulation by your definition, even though it is nothing of the sort.

All deregulation is not created equal. The state lifts price controls on a commodity and soon most of the current vested interests go out of business due to new and smarter competition, offering lower prices and better service. Should we "blame" deregulation or the poor performance of the older businesses that thrived on the lack of real competition?

In my home state, "deregualtion" has been blamed for high electricity costs. Yes, the state legislature did allow competition in our electrical market in 1999, but they also pegged electrical prices to 1993 rates until 2007. Only a schmuck would try and compete against the incumbent provider, and no one did. Needless to say, last year it was, SURPRISE! Here's your 72% RATE INCREASE! Have fun!

Going home now....

|10.20.08 @ 6:51PM|#

The 2000 act prohibited regulatory agencies from creating and applying regulations to these instruments. That's de-regulation in most folks minds.

OK, going home after this....

But, did it repeal a prohibition on regulating CDSes or did it simply not foresee the future and not prohibit the activity?

If the latter, it's not deregulation, regardless how people think about it.

Franklin Harris|10.20.08 @ 7:01PM|#

Does Weisberg actually go on to explain how any of this is inaccurate?

No.

|10.20.08 @ 7:22PM|#

Well, libertarians, look on the bright side: while your ideas are experiencing a downward trajectory in terms of public respect, they're the freaking Gospel of St. Matthew compared to the Republicans'.

|10.20.08 @ 7:29PM|#

Weisberg on libertarians: Utopians of the right, libertarians are just as convinced [as Marxists were after the fall of communism] that their ideas have yet to be tried, and that they would work beautifully if we could only just have a do-over of human history. Like all true ideologues, they find a way to interpret mounting evidence of error as proof that they were right all along.

JW on the Commodity Futures Modernization Act, which deregulated commodities markets, but not as much as JW would have liked: Yet another unlibertarian law, enacted by what I would call unlibertarian means, voted on by not a single libertarian and signed into law by someone, not a libertarian.

Point Weisberg. True Socialism has never been tried.

|10.20.08 @ 7:32PM|#

maybe you can actually address the post, joe, instead of the commenters on it.

John Donohue|10.20.08 @ 7:34PM|#

With a President Obama and a Democratic Congress, thank goodness things will soon be put right; everything will be re-regulated.

This time they should make the world safe from cowboys once and for all: just regulate everything.

The pesky job will be putting a fist through the skull of every producer so they can regulate their urge to Shrugg.

John Donohue
Pasadena, CA

|10.20.08 @ 7:37PM|#

"The Angry Optimist | October 20, 2008, 7:32pm | #

maybe you can actually address the post, joe, instead of the commenters on it."

"The Angry Optimist | October 20, 2008, 6:24pm | #

MNG is in one of "those" moods again today, I see. Anybody trying to have a serious conversation with him is going to be sorely disappointed."

Physcian heal thyself.

|10.20.08 @ 7:42PM|#

TAO,

Are you new here? I swear I've seen someone posting under your name before.

|10.20.08 @ 7:46PM|#

"If the latter, it's not deregulation, regardless how people think about it."

I think you're wrong on both points (both led to less regulation than otherwise, which I should think is de-regulation), but we don't need to waste any time on that really, as we can not call it regulation and call it a "free (or "pro") market reform" and it still would be something at least rhetorically associated with libertariansim. Unless you think that no reform has ever been a free/pro market reform because it did not create "true capitalism."

For the record I don't say that government did not cause this. I really don't think I know enough about the financial sector to "know" what caused this.

I do think though that a reasonable explanation for the crisis that relied simply on the kind of mass human greed and stupidity that markets allow all the time is certainly possible. And it did occur following a time of much bally-hooed "free market reforms" or "de-regulation." So it's plausible to me that government may not be to blame. Don't get me wrong, it's plausible to me and there is also some neat correlations of things that suggest government interventions might have contributed to this mess too.

But my original point was that to the extent that the reforms I mentioned are seen as both causing this crisis and as in accord with libertarian principles and precepts, then yes people will blame them.

|10.20.08 @ 7:48PM|#

I think he's the former Ayn-Randian. Not sure why he changed.

A lot of people make a lot of fun of "Rand-bots" and such here. But for the record A-R was always quite reasonable on the subject of Rand, no Kool-Aid drinker or cultist did he strike me as...

|10.20.08 @ 7:53PM|#

MNG - I don't have any major contention with the attack on Weisburg. joe does.

Hugh - the name is relatively new, but I've been here a while.

|10.20.08 @ 7:54PM|#

MNG - I changed it because I found that a lot of people wanted to argue with me about Objectivism and instantly pigeonhole my views and laugh about Rand and blah blah blah rather than take me for me.

Mike Laursen|10.20.08 @ 7:55PM|#

My neighbor grosses about $6K/month and took a mortgage loan for $4.8K/month. Can I add him to your list?

I'm not sure I followed the point of your comment. Sorry.

Mike Laursen|10.20.08 @ 7:57PM|#

So let's not have silly people saying that what differentiates libertarians and those who disagree is that the former believes in not imposing anything on anyone, or forcing anyone to do anything, and the latter does.

There are different flavors of libertarians who support varying degrees of coercion.

p-B11|10.20.08 @ 7:59PM|#

I'm a person that thinks the concept of "private property" is silly. Therefore I think I can crash on anyone's property whenever. Libertarianism as an idea is not going to impose anything on me?

Libertarianism will protect your neighbor's rights from your imposition.

Libertarianism =/= anarchism.

|10.20.08 @ 7:59PM|#

Yeah, Game 5 of the 1986 ALCS really sucked.

p-B11|10.20.08 @ 8:03PM|#

So let's not have silly people saying that what differentiates libertarians and those who disagree is that the former believes in not imposing anything on anyone

Liberty is the absence of coercion.

Libertarians generally believe government should only coerce in order to protect an individual's rights. All other uses of coercion are immoral.

|10.20.08 @ 8:08PM|#

"There are different flavors of libertarians who support varying degrees of coercion."

Mike, I know that. Which is why it drives me crazy when someone gives some silly version of libertarianism.

"Libertarians generally believe government should only coerce in order to protect an individual's rights."

Like that one. It's silly because a liberal, conservative, or whatever can say the same thing, it's just they would define "an individual's rights" differently.

TAO
But weren't you addressing a commentator on the post rather than the post in the quote I give? Don't say you were just engaging in a sense of humor, I know for a fact from Palin-gate discussions with you that you don't have one of those ;)

|10.20.08 @ 8:15PM|#

I had figured you would bust out the ol' Adlai Stevenson playbook, MNG. Predictable.

p-B11|10.20.08 @ 8:19PM|#

it's just they would define "an individual's rights" differently.

And they would be wrong. They can call an ostrich a pony if they like, it doesn't make it so.

Silly is letting them do it.

David|10.20.08 @ 8:21PM|#

Alan Vanneman 5:26 PM,

I wish I could refute you, but it's just impossible.

p-B11|10.20.08 @ 8:24PM|#

Anyways, this clearly isn't true. How can a conservative claim drug prohibition protects anyone's rights? How can a liberal plausibly claim gun control protects any individual rights?

Leftists start with social justice as a first principle, conservatives generally start with tradition. They can try to steal the language of libertarians, but it never rings true.

|10.20.08 @ 8:36PM|#

maybe you can actually address the post, joe, instead of the commenters on it.

I did. I agreed with one of the author's central points, and provided an example that demonstrates his case. Did you actually not grasp that?

Wow|10.20.08 @ 8:41PM|#

Wow, there is someone even stupider than Weisberg here.

I wouldn't have thought that possible.

|10.20.08 @ 8:42PM|#

A conservative would just say they are protecting the individual's right to be free from harm (either self-harm or Reagan's "what if the pilot is high" kind of harm), as would the liberal on gun control btw.

Now you might argue there is no such right, or that the right exists but does not apply to this situation, but my point is that the libertarian, the conservative and the liberal all would say they are for the exact amount of government coercion necessary to protect certain rights they think important.

So a libertarian is not someone who restricts government coercion to that necessary to protect rights, everyone is that. Libertarianism must have something to do with which rights are important and such.

|10.20.08 @ 8:43PM|#

p-B11,

A conservative could claim that drug prohibition protects the rights of parents to raise their kids in a drug-free environment.

I imagine you'd disagree pretty strongly with that position, because - and here is the important part - you don't agree with their definition of rights. You don't think that those things are rights.

Since you lay out the terms by which you are quite happy to see government coercion - conditions under which you consider it mandatory, even - you have acceded to MNG's point.

|10.20.08 @ 8:48PM|#

Too often someone here, good libertarians all I'm sure, will just state that someone like me, or joe or heck on the other side TallDave just are "against freedom/liberty" or "for coercion/slavery/etc". That's silly and nonproductive I argue. If libertarians want to say the things we think are not rights or that the rights we imply do not warrant government coercion to protect them, then fine, that's a good discussion to have. But to state that libertarians don't believe in coercion are are defined by being "for liberty" or "not imposing anything on anybody else" then that's silly. Libertarians believe in coercion, imposing on others their values and all that, just for different reasons than liberals and conservatives.

p-B11|10.20.08 @ 8:49PM|#

A conservative would just say they are protecting the individual's right to be free from harm

And a libertarian would simply point out that in most situations an individual can use drugs and not harm anyone. And how does gay marriage harm anyone? Their philosphies are simply not compatible with a first principle of liberty.

the conservative and the liberal all would say they are for the exact amount of government coercion necessary to protect certain rights they think important.

That's a very problematic argument for them to make, and for the most part they don't even try to. A conservative argues for coercion on the basis of tradition and belief, a leftist on the basis of social justice and the benefits of government control.

If you're going to concede them the "liberty" ground, you've already lost the fight.

Mike Laursen|10.20.08 @ 8:53PM|#

Mike, I know that. Which is why it drives me crazy when someone gives some silly version of libertarianism.

I can relate.

p-B11|10.20.08 @ 8:55PM|#

UInfortunately, we have people deliberately muddying the debate by trying to redefine what a "right" is.

You have a right to be free from violation of your person and property. There are no other rights.

|10.20.08 @ 8:56PM|#

"If you're going to concede them the "liberty" ground, you've already lost the fight."

I wouldn't advocate libertarians concede the liberty grounds (I wouldn't do likewise for liberals either). But they have to argue that their philosophy is the correct or best mix of preserving a value like liberty while acknowledging that at times liberty must be restricted, and yes by government, in order to foster overall liberty (i.e., the reason we can have government police is because restricting folk's liberty to protect their legit property and rights fosters more liberty). Now we can properly argue about that correct mix.

In the words of my old philosophy prof the debate should center on which "maximizes" the value thought to be important (here liberty)

btw-I would add that liberty is probably not going to be the only value to be maximized or at least respected, welfare (as in utility) would have to count for something I should think).

Well, game is one, gotta go. Enjoyed it.

|10.20.08 @ 9:01PM|#

Arrgh, "game is on" that should read

I should add that this part of my post:
"acknowledging that at times liberty must be restricted, and yes by government, in order to foster overall liberty"

should be qualified: there may be arguments that show that any liberty restraining but ultimately liberty maximizing constraints that government could provide certain private actors could provide equally well or better. I doubt such arguments could be made in all cases, but the door should be left open for them. The basic idea of maximizing liberty (which may involve some prima facie restraints on it to further more overall liberty) would still stand though

And NOW to the game ;)

economist|10.20.08 @ 9:01PM|#

Okay, my friend convinced me to unbury my head to read this part of H&R. All I can say: Weisburg might be this galgamar's winner of the Biggest Douche in the Universe Award.

p-B11|10.20.08 @ 9:02PM|#

But they have to argue that their philosophy is the correct or best mix of preserving a value like liberty while acknowledging that at times liberty must be restricted, and yes by government, in order to foster overall liberty

Yes, I think the latter part is what differentiates us from the others. Conservatives and liberals have different goals, even when they appropriate our language to make them sound better.

Americans have a strong instinct for liberty:

PRINCETON, NJ -- When given a choice about how government should address the numerous economic difficulties facing today's consumer, Americans overwhelmingly -- by 84% to 13% -- prefer that the government focus on improving overall economic conditions and the jobs situation in the United States as opposed to taking steps to distribute wealth more evenly among Americans.

It would be better if they focused on getting the hell out of the economy's way, but for a simple binary you have to like that.

economist|10.20.08 @ 9:03PM|#

Goddammit, I'm being pulled in.

MNG,
We had to kill the patient to save his life.

|10.20.08 @ 9:06PM|#

p-B11,

And a libertarian would simply point out that in most situations an individual can use drugs and not harm anyone. And how does gay marriage harm anyone?

As much as I agree with this argument, it doesn't go to the point.

Their philosphies are simply not compatible with a first principle of liberty. THIS goes to the point - you are defining rights; in this case, you are defining them as consistent with what you call "the first principles of liberty."

Not everyone agrees with your definition of rights. That's the point, that's what differentiates libertarians from conservatives and liberals. Everybody says they're willing to see the government coerce people in the defense of rights, but some people define rights in terms of "the first principles of liberty," while others define them in terms of, as you say, "social justice" or "tradition" or some other standard.

|10.20.08 @ 9:10PM|#

You have a right to be free from violation of your person and property. There are no other rights.

Says you. You realize there are people who define rights differently, correct?

Now, don't say "But I'm right." Just answer the questions: you realize there are people who define rights differently than you, correct?

They support the use of coercion to protect rights as they define them, and you support coercion to protect rights as you define them.

The difference here is in how people define rights. Yes, I know, your definition is the only right one. The thing is, the other people say the same thing. I think you both have different ideas, and that's what defines your political philosophies.

|10.20.08 @ 9:11PM|#

Buddy Holly: Witches. Libertarian witches

Gaaak! They're so onto me!

|10.20.08 @ 9:15PM|#

People like joe are wierd.

If you think libertarianism is wrong, why bother hanging out on a libertarian site arguing with libertarians? The only explanation I can think if is that joe is afraid that our ideas are winning, or something.
Surely he can't be threatened by the disturbing amount of political power we have.

|10.20.08 @ 9:19PM|#

Hazel,

Because sitting around in a mutual admiration society with people who agree with me doesn't allow me to grow intellectually.

I disagree with libertarianism as a theory of politics, but it does raise a lot of important, insightful critiques of liberalism, and I become a better liberal thinker for having confronted them. Sometimes, I'm even compelled to change my position to accommodate the insights I get from libertarians.

|10.20.08 @ 9:19PM|#

There are much weirder things about me than that.

Well, there used to be. I'm pretty boring these days.

|10.20.08 @ 9:27PM|#

joe: I'm surprised. An honest answer that I can relate to. All right. You're off the hook for now.

Shite. I think many libertarians come to this position primarily through boredom with liberal mutual admiration societies.

So when you're around your liberal friends, do you tend to argue the libertarian position?

|10.20.08 @ 9:53PM|#

Liberal mutual admiration societies can be pretty boring.

I've been known to say "I don't want to sound like a libertarian, but..." on occasion.

K.T.|10.20.08 @ 10:00PM|#

The Washington Post editorial board would seem to disagree with Mr. Weisberg.

Is Capitalism Dead?

nonPaulogist|10.20.08 @ 10:05PM|#

The paleolibs have not left this challenge unanswered. Anthony Gregory posts at Lewrockwell.com:

http://www.lewrockwell.com/gregory/gregory165.html

|10.20.08 @ 10:14PM|#

From Mr. Gregory's article:

No libertarian could long be the Fed chairman, for the position is intrinsically unjust and the agency is at constant war with economic liberty...You can no more be a libertarian Fed chief than a libertarian drug czar.

so, if given the opportunity, despite all of the good I could do FOR the victims of the WoSD as drug czar, I should turn it down?

See, this is what I'm talking about: Ron Paul is supposedly some great "hero" in Congress for doing nothing. I'd rather have a drug czar who rolls back the WoSD 50% than some idiot who yammers on how "unjust" the WoSD is.

We know that...but given the opportunity to make things better, "principled" libertarians turn tail.

Warty|10.20.08 @ 10:26PM|#

You talk politics with your friends, joe? With my drinking habits, I've found that that just leads to punching.

Just Plain Brian|10.20.08 @ 10:36PM|#

I'd rather have a drug czar who rolls back the WoSD 50% than some idiot who yammers on how "unjust" the WoSD is.

And I would bet that the drug czar that tried to roll back the war would not be the drug czar for long. Then they would replace them with a drug czar that would enforce the policy much more vigorously, and it would still be a net loss.

I'm with you in spirit, TAO, but I believe the good you would do for the victims of the WoSD in your hypothetical would be minor and short-lived.

Just Plain Brian|10.20.08 @ 10:39PM|#

but given the opportunity to make things better, "principled" libertarians turn tail.

Depends on the opportunity - I may not consider working on the enforcement end to be that opportunity, but I'm a big believer in jury nullification in order to make a difference.

Mike Laursen|10.20.08 @ 10:43PM|#

You have a right to be free from violation of your person and property. There are no other rights.

Baloney. There's no such thing as natural rights, nor an axiomatic set of rights that can be enumerated so easily. Rights are something that you negotiate and fight for. Rights are a human invention and, therefore, we can invent new ones.

|10.20.08 @ 10:53PM|#

Because sitting around in a mutual admiration society with people who agree with me doesn't allow me to grow intellectually.

Joe,

I've been reading your comments here for quite a while, and I'm sorry to say that you might as well just hang out on the Daily Kos. Your prospects for intellectual growth are limited, to say the least.

-jcr

|10.20.08 @ 10:54PM|#

Liberal mutual admiration societies can be pretty boring.

Boring, despite being quite vicious as a matter of course.

-jcr

Trotsky|10.20.08 @ 11:18PM|#

Liberal mutual admiration societies can be pretty boring.

Like an icepick to the brain sometimes.....

Sam Grove|10.21.08 @ 12:16AM|#

I can still remember the good ol' days when California electricity markets were 'deregulated'.

It's the fault of those damn Republicans claiming to be for less government and free markets, and the left for swallowing whole the biggest lie of the Republican party establishment.

Amakudari|10.21.08 @ 1:58AM|#

What a ridiculous article.

We have narrowly avoided a global depression

How narrowly? Maybe I'm just an optimist, but I'd say we're a good systemwide bank failure (read: most of Citi, BofA, Wells, JPMorgan, Morgan, and Goldman) away from depression territory. Right now, we can find a bottom because good banks can take over failed banks with little difficulty. I saw a Bloomberg interview with Krugman where he figured unemployment had a 50/50 chance of reaching 8%; in the Big D, half the fucking labor force was un- or under-employed. Yet we narrowly avoid a wholescale collapse, presumably because the good guys in Washington got together and finally stopped doing the libertarians' bidding? (Okay, fine, that's a strawman.)

I'd love to see him string together a coherent sentence about finance. As if the above weren't bad enough, he actually had the balls to say:

After LTCM's collapse, it became clear to anyone paying attention ... that unregulated credit-market derivatives posed risks to the global financial system and that supervision was advisable. This was a very scary problem.

LTCM screwed itself on a mix of leveraged fixed income arbitrage bets, a horrible fixed income environment in Russia and Asia, and undeserved trust. Not only did credit derivatives have absofuckinglutely nothing to do with it, but the market is so recent it shows how little he understands about that actual problems.

How you can pass on criticizing GSEs that backed $6 trillion in mortgages and had the explicit support of Congress, then rush to blame a group whose only political contribution in recent memory is some borrowed rhetoric is beyond me.

|10.21.08 @ 2:15AM|#

Deregulating without making the deregulated businesses assume their own financial risks is not a libertarian idea. Businesses with no explicit or implicit government guarantees make completely different decisions. Wall Street, FNMA, FHLMC and their cohorts knew Washington and the Fed would be there to bail them out so the risk seemed worth it.

Famous Mortimer|10.21.08 @ 2:42AM|#

Leave it to Libertarians to respond to criticism in the same narrow minded, uber confident manner that they are often criticized for, ripe with veiled anger, and catty name-calling.

Nothing will sway you from your lofty perch.

How can any of you be happy?

I'll read Libertarian thought on civil Liberties, but as for economics, forget about it.

It's about as rewarding as discussing young Earth creation with a Christian fundamentalist.

|10.21.08 @ 2:47AM|#

I'll read Libertarian thought on civil Liberties, but as for economics, forget about it.

If you can't keep what you earn, you're not free.

-jcr

Famous Mortimer|10.21.08 @ 2:58AM|#

Exhibit A:

"Anyone have the feeling that the Left is trying to use the economic situation to discredit the libertarians now so no one will listen to the libertarian arguments against the coming-up-fast federal bans on smoking, drinking, eating, and generally merriment?"

Honestly, are you so entrenched in this world of Libertarian thought that you believe that mainstream political affiliates are actually devising a plot to counter act a relatively small, inconsequential group of grumpy old men?

Exhibit B:

"The phrase "intellectually immature" is a vague and objectively meaningless statement intended to judge without addressing any specific, measurable criteria."

This is an opinion piece, not a Graduate paper on Libertarian group-think.

How can so many of you sit there with a straight face, and rail against his impression of Libertarians, when you routinely do the same thing on here, day in, and day out? It's some kind Libertarian bizarro world, where the rules of logic are suspended when it comes to Libertarians.

I'm truly shocked at the blatant inconsistency.

There's very little that is REASONable about many of these "sneers."

If these responses prove anything, it's that he has hit a button... forcefully. An appropriate response would be to ruminate about these criticisms, not unconvincingly dismiss them, and revert to stale, ad-hominem attacks.

FYI: It makes you look guilty.

You lazy twats need to change your way of thinking if you ever hope to enact any politcal change, beyond engaging in these stressed out, bored house-wife style pissing matches.

Famous Mortimer|10.21.08 @ 3:03AM|#

"If you can't keep what you earn, you're not free."

And if you can't shit on the sidewalk without getting a ticket, you're not free either.

Freedom from any taxation is not an inalienable Constitutional right, but Libertarians have probably printed their own Constitution with the "appropriate" corrections.

Statements like this one are why Libertarians are routinely mocked.

Famous Mortimer|10.21.08 @ 3:13AM|#

"I disagree with libertarianism as a theory of politics, but it does raise a lot of important, insightful critiques of liberalism, and I become a better liberal thinker for having confronted them. Sometimes, I'm even compelled to change my position to accommodate the insights I get from libertarians."

Amen, Joe.

Watching Liberal shut-ins stare with mouth agape when someone unexpectedly responds with a Libertarian argument is both awkward, and incredibly satisfying.

You can tell that the thoughts have likely never occurred to them. How could good intentions ever lead to something bad? Afterall, they're "good."

It's Fischer Price logic.

However, this is routine for just about every devout politcal philosophy. Liberals hardly have that market cornered, there's just more of them, like there are more religious apologists as well.

Life is lonely in the middle.

Abhishek Saha|10.21.08 @ 4:00AM|#

Look I am a libertarian. And there has been a flood of responses by libertarians today to Weisberg's article.

What do Weisberg's article and its libertarian rebuttals achieve?

Here's my radical suggestion: They achieve nothing.

There are some features that are common to every article - by both sides - on this topic I have seen. They cherry-pick facts. They deflate the opponent's views and inflate their own. Every sentence is intended to further their own cause. In short, they counter, not analyze.

I am not saying that both sides are wrong. I do happen to think my side has the better arguments. In sum though, we are approaching this whole issue as if it were a debate.

Now there is nothing wrong with a debate. The problem though is that we have seen all these points many many times. None of the articles I have quoted above contain any fundamentally new points of view. Basically, there has appeared a flood of arguments since this crisis started but little attempt at unbiased analysis. We are all guilty of this extreme partisanship - yes, I am too.

It's like we are stuck in different ideological echo-chambers. And there are intelligent people on both sides. And you know what, none of them are changing their minds. Weisberg's article is not going to convince anyone who is not already on his side. And the libertarians aren't going to win any Weisberg types - or even any moderately liberal types - over with their responses.

So here's my humble suggestion to everyone. Analyze rather than attack. It will be difficult, especially when you think that the other side is spouting nonsense. But bite the bullet and address your opponent's strongest arguments. Do so logically, unbiasedly. Take the best arguments from both sides - if you feel the other side isn't making its point correctly, try to help them - and the most accurate data available to you and reason as if there was nothing at stake, except rigor and accuracy. Get beyond bumper-sticker sloguns and into details. Ultimately your ideas and arguments must stand on their own. Do not be afraid of the possibility that they may lose, at least temporarily.

There is a word for this approach. It is called intellectual honesty. And it is our best bet at conversion.

|10.21.08 @ 5:53AM|#

Okay, just playing progressive-devil's advocate here. There obviously aren't any elected libertarians to blame, but how about Greenspan?

Do Reason readers think that he had no influence on the current crisis? Or that he's not a libertarian? Or just that he didn't act in accordance with libertarian principles?

I'm asking innocently, by the way. I don't have any axe to grind here.

|10.21.08 @ 6:09AM|#

Actually, I guess Greenspan didn't really have anything to do with regulation or deregulation, so he's not very relevant to the discussion. I retract my dumb question.

|10.21.08 @ 7:26AM|#

Freedom from any taxation is not an inalienable Constitutional right,

I see that you subscribe to the common misconception that the constitution is the source of our rights. It's not. The constitution is a legal instrument by which some of our rights are delegated to create the legitimate powers of the government.

-jcr

|10.21.08 @ 7:28AM|#

ZIncfinger,

Greenspan can possibly be described as a one-time libertarian, but by participating in the Federal Reserve, he became a thief and a counterfeiter.

What makes him truly evil is that he knew full well what he was doing when he was inflating the money like it was going out of style.

-jcr

|10.21.08 @ 7:30AM|#

address your opponent's strongest arguments

Ok. Can you point to a single example of a strong argument from Weissberg? All I saw in his article was baldfaced lying and socialist fantasy.

-jcr

|10.21.08 @ 8:43AM|#

MNG,
We had to kill the patient to save his life.

Killing the patient won't save his life.

OTOH, gassing him, cutting him up, and introducing poisons to his system frequently does.

p-B11|10.21.08 @ 8:56AM|#

Says you. You realize there are people who define rights differently, correct?

You may call a dog a sparrow, but it will not fly.

There are things which are rights, and things which are not rights. These are easy to distinguish. A right is something that requires nothing from anyone else, and infringes on no one else.

Some falsely argue, for instance, that a person has a "right" to health care provided and paid for by one's fellows. This is clearly absurd. If one were the only human alive, there would be no one else to provide health care, and one's rights would be violated by the universe itself.

p-B11|10.21.08 @ 9:04AM|#

Rights are a human invention and, therefore, we can invent new ones.

No, rights are a description of a state of reality in which we have freedom.

One might just as well claim physics is a human invention and therefore we can invent new physical laws.

Obviously this is true in the grossest sense: one could pronounce that E=mc^3, but this would work poorly in application, as do inaccurate theories of rights.

Mike Laursen|10.21.08 @ 9:26AM|#

No, rights are a description of a state of reality in which we have freedom.

Is the next thing you're going to say is that God gave us our rights?

|10.21.08 @ 9:59AM|#

Joe,

I've been reading your comments here for quite a while, and I'm sorry to say that you might as well just hang out on the Daily Kos. Your prospects for intellectual growth are limited, to say the least.

Thank you, Mr. Randolph, but even for someone like me, there are still more mountains to climb.

|10.21.08 @ 10:03AM|#

Famous Mortimer,

Watching Liberal shut-ins stare with mouth agape when someone unexpectedly responds with a Libertarian argument is both awkward, and incredibly satisfying.

I think that one of the reaons liberalism has a tendency to become intellectually corpulent is because the only criticisms many liberals come across come from the Republicans. Not a whole lot of potential for intellectual growth down that path.

|10.21.08 @ 10:05AM|#

There are things which are rights, and things which are not rights. These are easy to distinguish.

Honest question, p-B11: how old are you? Is it a number that ends in "teen" by any chance?

It is easy and obvious how to define rights? Not only do you think you're right - heck, we all think we're right - but you actually believe that your is the only plausible, consistent position?

Grow up.

|10.21.08 @ 10:26AM|#

"The feedback loop is an essential element of the free market. It's the entire point of why markets work - negative feedback. Of course markets produce bubbles. Of course banks will make bad loans and go bankrupt sometimes. Free market advocates make absolutely no claims that they won't. What we do claim is that if you let the businesses fail that such things will tend not to happen again. Business failures are not market failures. Failure is how inefficiency gets punished. Recessions are not market failures. Recessions are necessary restructurings."

And we're back in the paradise of the 19th century. Yay!

Almost-libertarianism has been tried. People keep forgetting that. It resulted in a constant seesaw of booms and crashes that culminated in the Great Depression, but it wasn't the only depression.

|10.21.08 @ 10:47AM|#

"This was not a libertarian-inspired deregulation. It was done in the name of social justice."

Right on, brother! The stuff that's been going on has always been framed in the context of "it's for the children","for the working family", or "for the little guy." When, in fact, these grandiose programs have done nothing more than institutionalize social ills. Bureaucrats and systems are no more than "broken window" fixes (nothing PRODUCTIVE or GAINED from their existence) caused by the policies enacted and fostered from one administration to another.

If anything, please remember this and pass it along to a friend: "IDEAS HAVE CONSEQUENCES"

|10.21.08 @ 10:55AM|#

"Almost-libertarianism has been tried. People keep forgetting that. It resulted in a constant seesaw of booms and crashes that culminated in the Great Depression, but it wasn't the only depression."

Dear Voice of Reason,

Please revisit the history of the years preceding the Great Depression and share with us how "almost-libertarianism has been tried." I don't follow. In my research, there was significant government intervention that prolonged the depression.

|10.21.08 @ 11:03AM|#

Utopians of the right, libertarians are just as convinced [as Marxists were after the fall of communism] that their ideas have yet to be tried, and that they would work beautifully if we could only just have a do-over of human history. Like all true ideologues, they find a way to interpret mounting evidence of error as proof that they were right all along.

Please revisit the history of the years preceding the Great Depression and share with us how "almost-libertarianism has been tried." I don't follow. In my research, there was significant government intervention that prolonged the depression.

The small-government, laissez-faire policies during the 19th century weren't True Libertarianism. True Libertarianism has never been tried. In fact, all of the problems with that system were the result of it not being pure enough.

|10.21.08 @ 11:16AM|#

In fact, the small government, laissez-faire policies of the 19th century resulted in some of the greatest advancements in human wealth ever seen. I'd say overall that experiment was pretty successful.

I'd also say that the panics and crashes of that era were due to inappropriate monetary policy. And, that the length and depth of the great depression was largely caused by the interventions of the Hoover and Roosevelt administrations. These differed from the "let them fail" policies in previous market corrections.

|10.21.08 @ 11:31AM|#

matth,

Was it the libertarian policies, or the industrial development that led to that creation of wealth?

And didn't we, and every other growing industrial power, have some pretty significant protectionism, far beyond anything contemplated today, in place while that industrial growth took place?

But that aside, we're talking about financial regulatory policy. The wild-west banking system back then saw the same thing happen over and over again - failures of financial institutions resulting in depressions/panics through the mechanism of cascading failure, the same thing we saw when the stock market crash of '29 wiped out so much leveraged money.

In some cases, the national economy went into a depression purely as the result of the goings-on in the financial sector, without there being a real business-cycle cause behind it.

We haven't seen that since the SEC and FDIC and other New Deal regulatory efforts came into being - at least, not in the 70 years before this year.

|10.21.08 @ 11:47AM|#

Point Weisberg. True Socialism has never been tried.

Um, no. Try again.

It's not that libertarianism wasn't *ever* tried, but simply that we had nothing to do with that bill, even though libertarians are blamed.

Plenty of blame to go around to the 2 major parties that actually drafted and passed it though. But we'll just keep that part a secret. It'll just be between you and me.

Mike Laursen|10.21.08 @ 11:52AM|#

There are things which are rights, and things which are not rights. These are easy to distinguish. A right is something that requires nothing from anyone else, and infringes on no one else.

By the way, I understand the difference between rights and entitlements. I'm arguing that rights, with the same definition you use, are a human invention. An ongoing human invention.

Mike Laursen|10.21.08 @ 11:55AM|#

Was it the libertarian policies, or the industrial development that led to that creation of wealth?

Queue lengthy debate about 19th-Century railroads, in 3, 2 ...

|10.21.08 @ 12:01PM|#

For the record I don't say that government did not cause this. I really don't think I know enough about the financial sector to "know" what caused this.

I think it's a perfect storm of greed, both monetary and ideological, helicopter money and short-sighted (or flat-out stupid) actors. It will be a while before anyone can effectively and accurately analyze this event.

Or maybe we can just read Weisberg. He seems to have all the answers.

From everything that I've read so far, the trail is starting with Fannie, Freddie and the Fed. It's far more complex than that, but suffice to say, the rest may have been close to null without those 3.

|10.21.08 @ 12:04PM|#

JW,

It's not that libertarianism wasn't *ever* tried, but simply that we had nothing to do with that bill, even though libertarians are blamed.

This isn't a debate about persons, but about ideas. Nobody, and certainly nothing in anythingt I wrote, argues that members of the LP had anything to do with that law.

|10.21.08 @ 12:06PM|#

Queue lengthy debate about 19th-Century railroads, in 3, 2 ...

I call this the Libertarian One Drop Rule.

If you can show any degree of government involving in, or during the same time as, an event that is harmful, all responsibility and causation for that event accrues to the government.

|10.21.08 @ 12:10PM|#

Wait, JW, I take that back.

Lots of people are blaming that Randroid Alan Greenspan!

;-)

|10.21.08 @ 12:12PM|#

This isn't a debate about persons, but about ideas. Nobody, and certainly nothing in anythingt I wrote, argues that members of the LP had anything to do with that law.

Libertarianism, a much discredited and disdained ideology, is so pervasive and influential that it can penetrate the Fortress of Democrats and cause them to draft and vote for something that they would typically oppose? And we got to Europe too!

How does that work?

|10.21.08 @ 12:25PM|#

joe--I'm really trying to see libertarianism in the process that supposedly created all of the evil deregulation and I 'm just not seeing it. Passed by a sizable majority of both houses and signed by a popular and centrist prez?

This is like all the people who claim that they were fooled by all the bad intelligence over WMD. Sure, we voted for the war and made all the funds available for executing the war, but that mean man lied to us!

Ditto for the PATRIOT Act. We didn't read it, but TEH TERRORISTS will kill us all if we don't vote for it. They promised us nothing bad would happen.

Sorry, but it doesn't wash. Either you didn't understand what you were voting on or you did, and saw worthwhile ideas to endorse and vote for. Either way, you don't get to dodge the responsibility for your actions and lay the blame elsewhere.

|10.21.08 @ 12:28PM|#

Joe,

Being a good libertarian, I'd say it's the freedom to act in accordance to our own perceived best interest that allowed the industrial development and increases in wealth. I'd also say that more freedom (less protectionism) would have led to more prosperity - but that's theory.

And, yes, the wild west banking system allowed (caused?) failures, panics, etc. perhaps because of an unstable money supply. And, perhaps that unstable money supply is the cause of the business cycle, so those things would be related.

I'd also argue that we have seen massive depressions since the advent of FDIC and the SEC. Reference the 70s. A lot of wealth was destroyed that decade thanks to government policies.

Disclaimer - I'm an engineer who builds toys for rich folks. Not an economist, nor an economic historian. So, my primary research in this field is limited.

|10.21.08 @ 12:38PM|#

JW,

Libertarianism, a much discredited and disdained ideology, is so pervasive and influential that it can penetrate the Fortress of Democrats and cause them to draft and vote for something that they would typically oppose?

A watered down version, manifesting itself in the belief that a hands-off approach to the creating accounting innovations of Wall Street wunderkinds will allow them and their employers to be more dynamic, and better manage risk than some stuffy old rules, creating broader prosperity, became mainstream thinking among the people setting our financial regulatory policy.

How does that work? In general, such ideas spread through the efforts of think tanks, pushing their ideas through direct contacts with policymakers, as well as through the print and broadcast media.

|10.21.08 @ 12:40PM|#

Sorry, but it doesn't wash. Either you didn't understand what you were voting on or you did

Oh, they understood the deregulatory gospel all right. It was just wrong.

Either way, you don't get to dodge the responsibility for your actions and lay the blame elsewhere. Oh, don't get me wrong - I blame the propaganda victims just as must as their misleaders.

|10.21.08 @ 12:56PM|#

A watered down version, manifesting itself in the belief that a hands-off approach to the creating accounting innovations of Wall Street wunderkinds will allow them and their employers to be more dynamic, and better manage risk than some stuffy old rules, creating broader prosperity, became mainstream thinking among the people setting our financial regulatory policy.

This neat, little theory, however, doesn't explain how Europe and Asia got suckered into this. ZOMG! It's a worldwide libertarian conspiracy! Complete with sleeper cells!

I suppose I should take some satisfaction, joe, that libertarians are just that much smarter than everyone else, and can so easily fool them. We should take pity on such gullible saps.

Sure, joe. You go right ahead and maintain the WMD party line on this: they lied to us! We had no idea!

|10.21.08 @ 1:00PM|#

What exactly was deregulated and how did it effect this meltdown?

C'mon joe, you should be able to easily answer that, since you obviously know what went wrong. Right?

Mike Laursen|10.21.08 @ 1:08PM|#

If you can show any degree of government involving in, or during the same time as, an event that is harmful, all responsibility and causation for that event accrues to the government.

Yeah, true. But it works both ways. One drop of government subsidy for some successful industry, and you get people arguing that the government has to subsidize progress.

|10.21.08 @ 1:26PM|#

This neat, little theory, however, doesn't explain how Europe and Asia got suckered into this.

Europe and Asia just bought the securities. There's no ideology behind looking at highly-rating American real estate securities and treating them as you always have.

I suppose I should take some satisfaction, joe, that libertarians are just that much smarter than everyone else, and can so easily fool them. Well, I wouldn't count on your deregulatory gospel, or much else you have to say, having much traction from here on out.

Sure, joe. You go right ahead and maintain the WMD party line on this: they lied to us! We had no idea! I've answered this already. I trust that, were you able to mount a rebuttal, you would have.

What exactly was deregulated and how did it effect this meltdown?

Well, there was the elimination of firewalls between different types of financial institutions that increased the number of loans that got packaged into MBSs, and also created the situation of securities-rating firms having an financial incentive to over-rate MBSs.

But more important than that, in my estimation, was the deregulatory mindset behind such laws as the Commodity Futures Modernization Act of 2000 - you know, the one you couldn't understand except to note that it didn't create a libertarian utopia?

One example is the Act's ban on regulating credit default swaps, which forbade the government from requiring capital standards for the insurance policies on MBSs, leading to massive overleveraging by firms using MBSs and collateral, on the theory that the "insured" MBSs were safer than they actually were.

The problem here is one of regulating not keeping up with new practices, rather than removing regulations on existing practices.

Mike Laursen|10.21.08 @ 1:27PM|#

I'm really trying to see libertarianism in the process that supposedly created all of the evil deregulation and I 'm just not seeing it.

It's at least a plausible hypothesis, worthy of discussion, that some factors that contributed to the current financial crisis arose from following libertarian philosophy. For example, see this statement Senator Phil Gramm made at the signing ceremony for the Gramm-Leach-Bliley Act:

http://banking.senate.gov/prel99/1112gbl.htm

He speaks in favor of free markets and deregulation.

Mike Laursen|10.21.08 @ 1:31PM|#

Well, there was the elimination of firewalls between different types of financial institutions that increased the number of loans that got packaged into MBSs, and also created the situation of securities-rating firms having an financial incentive to over-rate MBSs.

Of course, now that I've said that its a plausible hypothesis, here's an argument from authority saying that this wasn't a factor. A quote from Bill Clinton:

"I don't see that signing that bill had anything to do with the current crisis. Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America, which was much smoother than it would have been if I hadn't signed that bill ... On the Glass-Steagall thing, like I said, if you could demonstrate to me that it was a mistake, I'd be glad to look at the evidence."

|10.21.08 @ 1:44PM|#

Two more points on regulation of MBSs.

First, you'd have to assume the regulators would have been smart and savvy enough to apply appropriate capital standards to the securities.

Second, they'd have had to realize that the housing bubble that was indeed national (caused by excessive monetary creation). So, all housing markets are not local and they are not safe from a common cause failure and devaluation.

|10.21.08 @ 1:46PM|#

It's an argument from authority, when the authority is making a non-sequiter.

That bill couldn't have caused the problem, because some aspect of that bill was useful after it happened.

Bill bought a cow. Bill's cow kicked over a lamp and started a fire. Bill poured milk from the cow on the fire, which limited the damage. Therefore, Bill's purchase of the cow had nothing to do with the fire.

Paul|10.21.08 @ 2:05PM|#

These problems will continue so long as fractional-reserve banking is the only way to bring money into the worldwide financial system. When you loan money out that belongs to someone else, and then hope they don't want too much of it back too soon or you'll go bust, that's a fundamental problem.

The Federal Reserve is supposed to take care of this. The ultimate regulatory check on the availability of liquidity failed in this instance, completely. Fractional reserve banking in and of itself is not some evil thing, it has a very legitimate place in the financial marketplace. But the whole game is rigged to accommodate nothing else as a viable entity.

Try to start a bank in the States or in Europe where you act as your own central bank, maintain reserves that can be used for liquidity quickly (currencies, PGM's, oil) that are not a counter-party risk (i.e., no debt as "securities") that back up the money you loan out for various banking endeavors, and you'll go to jail. Such a bank would have made an absolute killing over the past twenty or thirty years, and would have absorbed it's entire mortgage portfolio going into the tank and still maintained the asset value of its depositor's money. The bank can go broke if everyone queues up for their money one day, but no one is left out in the cold with their money gone, and no FDIC needed. I wish that bank was legal.

|10.21.08 @ 2:24PM|#

Europe and Asia just bought the securities. There's no ideology behind looking at highly-rating American real estate securities and treating them as you always have.

Europe also had their own version of G-L-B and operated similarly for much longer. If deregulation, as you put it, was the cause, then we should have seen warning signs in European markets before this. We didn't.

I've answered this already. I trust that, were you able to mount a rebuttal, you would have.

And you answered it via dodge and spin. Either we have politicians that are too stupid to be in charge or too irresponsible to be in charge. You pick.

But more important than that, in my estimation, was the deregulatory mindset behind such laws as the Commodity Futures Modernization Act of 2000 - you know, the one you couldn't understand except to note that it didn't create a libertarian utopia?

I think you're smart enough to grok the idea that I never made any such argument.

I also think you're smart enough to know that this situation is sufficiently complex that yelling "fire!" in an empty, burned out building, as is all the yelling of "deregulation!" after the fact is a bit less than intellectually honest.

|10.21.08 @ 2:32PM|#

Europe also had their own version of G-L-B and operated similarly for much longer.

European countries also has tigher regulations on those combined financial entities.

The rest of your comment is just vacuous insults and dodges.

Mike Laursen|10.21.08 @ 3:43PM|#

I dunno, joe, you're arguing with Bill Clinton, not me. Do liberals have decoder rings, and do you still have yours?

If you look at Clinton's quote, he makes two separate assertions: (1) "I don't see that signing that bill had anything to do with the current crisis."; (2) "Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America..." Using your analogy, Bill made a blanket statement that his cow had nothing to do with starting the fire. He also said that milk from his cow helped put out the fire.

Bill |10.21.08 @ 4:46PM|#

@jW
@mattxiv
@Mr. Nice Guy
@the angry optimist
@amakudari
@Famous Mortimer
@Zincfinger
@joe

Okay, please bear with me...I sent this email to to Matt Welch, hopefully he doesn't mind me reposting it here, but here's the brunt of it...sorry in advance for the length.

The center piece of Weisberg's contention (if there was anything specific) was "deregulation". Liberals who actually try to name something specific focus on GRAMM-LEACH-BLILEY ACT that changed Glass-Steagall. While the jury is out on that charge Ron Paul himself opposed it and put the following in the congressional record in 1999: http://www.house.gov/paul/congrec/congrec99/cr110899-glb.htm

* Government policy and the increase in securitization are largely responsible for this bubble. In addition to loose monetary policies by the Federal Reserve, government-sponsored enterprises Fannie Mae and Freddie Mac have contributed to the problem. The fourfold increases in their balance sheets from 1997 to 1998 boosted new home borrowings to more than $1.5 trillion in 1998, two-thirds of which were refinances which put an extra $15,000 in the pockets of consumers on average--and reduce risk for individual institutions while increasing risk for the system as a whole.
* The rapidity and severity of changes in economic conditions can affect prospects for individual institutions more greatly than that of the overall economy. The Long Term Capital Management hedge fund is a prime example. New companies start and others fail every day. What is troubling with the hedge fund bailout was the governmental response and the increase in moral hazard.
* This increased indication of the government's eagerness to bail out highly-leveraged, risky and largely unregulated financial institutions bodes ill for the post S. 900 future as far as limiting taxpayer liability is concerned. LTCM isn't even registered in the United States but the Cayman Islands!
* The better alternative is to repeal privacy busting government regulations. The same approach applies to Glass-Steagall and S. 900. Why not just repeal the offending regulation? In the banking committee, I offered an amendment to do just that. My main reasons for voting against this bill are the expansion of the taxpayer liability and the introduction of even more regulations. The entire multi-hundred page S. 900 that reregulates rather than deregulates the financial sector could be replaced with a simple one-page bill.

It's pretty amazing that Ron Paul was this prescient. Wiesberg even cited LTCM as the canary in the gold mine but Paul (again amazingly) addressed it 9 years ago and but cited it as a moral hazard in a corrupt pseudo deregulated system. This argument challenges Wiesberg on his own premise.

I'm sure the liberals would scoff at his suggestion of completely deregulating the system but isn't Paul's statement prima facie evidence that a libertarian (the only one in government) opposed the bill and predicted the hazard accurately? Wiesburg hangs the crisis on the neck of libertarianism so that it may be forever discredited. But wouldn't it be fair for us to now expect him to advocate Ron Paul's position of deregulation now given this evidence? If your going to blame an entire movement for it's supposed deficiency shouldn't the most prominent libertarian figure be given credit. Shouldn't his solutions now be given a fair hearing to the same extent Wiesberg's besmirched his philosphy? If not could it be because Wiesberg "like all true ideologues, [he] finds a way to interpret mounting evidence of error as proof that [he was] right all along."?

The problem I have with Wiesberg and his ilk is not necessarily his argument about regulation (which he doesn't even point to specific prescriptions) but his smearing and discrediting of an entire movement based on some marginal(if any)influence. The Jew argument is a bit over the top but admittedly somewhat apt.

p-B11|10.21.08 @ 7:12PM|#

No, rights are a description of a state of reality in which we have freedom.

Is the next thing you're going to say is that God gave us our rights?

You may posit a Creator if you like, but God is not necessary to the equation. It is empirically obvious (and has been for centuries) that maximizing freedom promotes the greatest good for mankind, and it is logically obvious that maxmizing freedom is most moral course.

Mike Laursen|10.21.08 @ 7:28PM|#

OK, so we know you believe: "You have a right to be free from violation of your person and property. There are no other rights." And we know you don't think that your formulation was handed down from God. So, can I assume you think that you can reduce all rights down to those two through some kind of logical reduction to axioms?

Do people have the right to trial by jury? Did they before anybody ever thought up the idea of a jury?

Does your 9-year-old daughter have a right to marry without your permission? What about your 13-year-old daughter? Your 18-year-old daughter?

Does a severely mentally retarded person have a right to sign a mortgage contract without a guardian's approval?

Do you have a right to cruelly abuse your household pets?

I could list a million such questions. They all point to why rights are an invention, and exactly what they should be is non-obvious and cannot be reduced to a few axioms.

|10.21.08 @ 7:49PM|#

p-B11 wrote:
You may posit a Creator if you like, but God is not necessary to the equation. It is empirically obvious (and has been for centuries) that maximizing freedom promotes the greatest good for mankind, and it is logically obvious that maxmizing freedom is most moral course.

First, the specifically libertarian conception of freedom, involving self-ownership and property rights, does not simply fall right out of the meaning of the open-ended and perpetually contested English term 'freedom'. Second, it is not empirically obvious (even if it is true) that maximizing freedom promotes the greatest good for mankind -- for one thing, it's not obvious what would even constitute 'maximizing freedom' or 'the greatest good for mankind'. Third, I have quite a few logic textbooks hanging around, and while they have a lot to say about truth-functional connectives and quantifiers, none of them say anything about the morality of maximizing freedom.

JMR|10.21.08 @ 7:54PM|#

Our opponents are fools. Life couldn't be better (except it would be nice if non-fools won political primaries every once in a while). Libertarians, who told everyone so, are now being blamed, but the blamer is so intellectually shallow even lefties are unlikely to believe him. Sucks to have an internet around to fact-check ya to the point that you're intellectually-trounced, eh Jacob??

JMR|10.21.08 @ 8:02PM|#

BTW, since his story has been pretty-well torn apart, it would be interesting to see Mr. Weisburg's reaction to this thrashing. Needless to say, he probably won't share my exact reaction, but facts are facts, and he's factually wrong about us all-powerful-politically libertarians, because we told him & everyone else so, almost a decade ago.

Mike Laursen|10.22.08 @ 12:11AM|#

It looked like his Slate article had no facility for reader comments. Correct me if I missed it. There's a positive correlation between boneheadedness and verbosity of political punditry websites and lack of anywhere to enter comments. I'm looking at you, too, Cato Unbound.

JMR|10.22.08 @ 5:19AM|#

Cluefulness also seems to correlate with just how easy an author is to contact. Dimwitted articles tend to draw "you dolt" emails, so I guess it's natural, but Jacob still knows he's intellectually trounced, whether or not he's likely to ever admit it or engage his trouncers in discussion of the trouncing.

Mr. Goodbar|10.22.08 @ 7:55AM|#

Mr. Nice Guy is correct to say that libertarianism also supports the use of coercion to defend rights. So the crucial question is, which system requires exponentially more coercion to support it: a libertarian one with a minimal, nightwatchman state, or a modern liberal democracy with its vast penumbra of rights?

Ayn Mudkips|10.31.08 @ 3:00PM|#

Jewish Media Marxist intellectuals have really been on a roll lately, haven't they?