Try Free Enterprise: Government Intervention Doesn’t Work
A great article by John Stossel:
When so many politicians speak with one voice in support of the biggest act of government intervention in the economy in generations, I cringe.
Everybody talked about the “freeze” in the credit markets, but why, I wonder, were the cable news programs that repeated the credit-freeze mantra, pausing for commercials from companies trying to lend me money? Ditech and LendingTree still hawk mortgages at under 6 percent. Some credit freeze.
Economist Robert Higgs of the Independent Institute looked at the credit numbers kept by the Federal Reserve. He writes: “Although certain financial institutions are undeniably in deep trouble — difficulties of their own making … — credit markets in general have not ceased to operate. Moreover, lenders are extending credit in historically great amounts.”
Maybe this is why CNN business reporter Ali Velshi broke ranks when reporting on “dried up” credit and said, “When I say ‘dried up,’ I don’t mean there’s no money. But you’d better have good collateral and good credit.”
What’s wrong with that?
To those who say that, without banks, nobody can borrow, economist Steven Landsburg offers this response: “Banks don’t lend their own money; they lend other people’s (their depositors’ and their stockholders’). Just because the banks disappear doesn’t mean the lenders will. Borrowers will still want to borrow, and lenders will still want to lend.
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Tags: ali velshi, banks, cnn, credit freeze, federal reserve, free enterprise, government, intervention, john stossel, mortgage, robert higgs, steven landsburg
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