William Simon Professor of Economics
and Public Policy at Hillsdale College
(I inserted the links):
“Our current financial crisis is the result of several government interventions in the market – Fannie Mae's government sponsorship, the Community Reinvestment Act of 1977, the creation of the secondary mortgage market and imposition of government accounting rules.”
“government attempted to increase home ownership beyond what the market would or could sustain”
“In a series of regulatory changes, Fannie Mae was granted certain privileges in order to expand credit into the subprime market. In 1999 The New York Times reported on the expansion of credit to minority borrowers through easing credit restrictions.”
“Unfortunately, as Mises predicted, the response to the financial meltdown has not been that the government should cease attempting to increase home ownership beyond what can be sustained in the market and should refrain from excessive increases in the credit markets. Instead, the attitude of many in the media and government has been that a crisis has occurred due to unfettered market capitalism and that government must be expanded in order to solve the crisis.”
“The security of our economic system lies in an understanding of the efficiency of the market system and its ability to provide wealth for the masses and realization of the failures of central planning and the process by which we end up there.”
