MCViewPoint

Opinion from a Libertarian ViewPoint

The Deregulation Bogeyman – LewRockwell

Posted by M. C. Fox on October 12, 2018

On the eve of the crisis there were 115 state and federal institutions whose job it was to regulate the financial sector. We are to believe that if only we’d had 116, things would have been better?

https://www.lewrockwell.com/2018/10/thomas-woods/deregulation/

By 

Ten years after the financial crisis of 2008, your friends are still saying the same thing:

“Don’t you libertarians know the financial crisis was caused by deregulation?”

It was not in any way caused by deregulation. We have to get this right, and we can’t let it pass.

F.A. Hayek once noted how important history was to current events: if we misunderstand history, we’re going to do the wrong things in the present. So if we think the late nineteenth century was characterized by “monopolies” from which wise government officials rescued us (and, unfortunately, this is indeed what most people believe), we’ll have different views on antitrust law than we otherwise would. Likewise, if we think the Great Depression was caused by “laissez faire,” that will influence the kind of economic policy we advocate today…

As I show in my new eBook The Deregulation Bogeyman (it’s free, by the way), none of the deregulation that did occur had anything to do with what happened in 2008 and the years that led up to it.

There is no repealed regulation that would have prevented the housing bubble and subsequent bust. Ask your friends exactly which repealed regulation(s) they’re talking about and they’ll run the other way. (The smart ones will mutter something about Glass Steagall; I handle that one in the book.) Banks did nothing they had not been allowed to do all along. The crisis occurred because banks made bad loans – in other words, they performed a traditional banking function badly…

The regulators themselves were essentially clueless as well, beginning with Alan Greenspan and Ben Bernanke, Federal Reserve chairmen during the relevant years. Bernanke couldn’t have been more wrong in his assessment of the housing market, lending standards, and the existence of a bubble.

On the eve of the crisis there were 115 state and federal institutions whose job it was to regulate the financial sector. We are to believe that if only we’d had 116, things would have been better?…

In 2009 I wrote my book Meltdown (a tenth-anniversary edition of which is slated for release next month) to explain what did cause the financial crisis (namely, a combination of Federal Reserve policy and federal interventions into the housing market)…

Be seeing you

Big Gov

I am from the government and am here to help.

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