As most people know, the U.S. House rejected a bill this week–a bill characterized as a “bailout” of “Wall Street”. Members of both the Democratic and Republican parties voted against the bill (ostensibly, for different ideological reasons). In listening to the rhetoric from both sides regarding this plan, there is one theme that rings clear across the board (and is, again ostensibly, derived from “listening to the constituents”). That theme is expressed as a loathing for the “financiers” on “Wall Street” and their “arcane” financial instruments that only “create bubbles and then burst them” (heard on an interview on NPR today). Thus, any “bailout” would only “reward” these parasitic bankers. The rhetoric here can be distilled–at its extreme and logical conclusion–to an unrestrained general attack on “finance capital”. Before we all agree on a Wall Street pogrom, we would do well to remember the economic ideas of one Gottfried Feder. During the heady days of its inception in the early 1920’s, the NSDAP party in Weimar Germany was headed by an obscure rhetorician who derived most of his theoretical economic sustenance by attending lectures by Feder. Feder’s main contribution to economic theory? The “half-baked” (see Donald C. Hodges, “America’s New Economic Order”) idea of destroying “finance capital” (which was also considered to be “Jewish” in some sense) while completely neglecting the rest of the capitalist superstructure.
The Rhetoric of Bailouts and Nazi Economics
October 1, 2008 by mes271
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This strikes me as an ad hominem.
Actually, to cite Leo Strauss, it’s an argument “ad Hitlerum” (to be specific)–a subspecies of ad hominem. Of course, I don’t reflexively genuflect at the altar of FALLACY. And, as the title of the post implies, the “rhetoric” on this issue is the level of discussion–hence, it is the level I engage with in my own writing….
The pressure that the House of Representatives have been feeling all week is the pressure of Republican and Democrats who do not want the U.S. Government to spend their money in this way. Contrary to what is reported in the press, we know full well the gravity of the situation and the possibly severe consequences but still do not care.
Genuine Republicans protested the actions that FDR took to ameliorate the Great Depression and are just as adamant that such things should not happen now because of of the price that is always paid in liberty for such security and never restored. Our national debt now is based on the idea promulgated during the FDR reign that government is supposed to be all things to all people. It is not, being just another service like the trash man One needs the trash man, cannot live very comfortably without him. But the idea that the trash should rule every aspect of our lives?
Secondly, we know full well that they are lying. They have been so crooked for so long that they are no longer are even aware that they are stealing from us. Current legislation is always designed to benefit an elite few. If it should trickle down all the better, both sides will take credit. The party leaders and the senators care only about the American people to the extent that it will solidify their power base. Who among those who pay attention is this not readily apparent to?
Not so the House of Representatives. They live or die by the opinions of their constituents, which is the reason that so much pork flows there. Public sentiment communicated to congressmen has been overwhelmingly against this legislation, media reports to the contrary. Our activists know what the count is. The majority of Americans do not want this to occur.
Letting the system fail is the answer. Then true reform will occur, and the guilty will be called to account. If you get your news somewhere else besides channel four, you know that world is crapping its pants. If we let the free market work undisturbed, failure may bring pain, but that pain will be born at the top as well as at the bottom. The business of the government should not be to regulate and rescue as much as it is to set ethical standards and punish criminals.
If you go to http://www.perotcharts.com you can see the facts about what is happening to our monetary system. The data there is solid and as far as I can see, not skewed politically one way or the other. Only facts. The current legislation will not solve the problem, it will allow those who are most responsible for the present debacle to escape relatively unscathed, but it will not deliver us for any significant amount of time from the impending collapse.
Some commentary on the bailout from tonight’s “debate”:
IFILL: Governor, Senator, neither of you really answered that last question about what you would do as vice president. I’m going to come back to that…
… throughout the evening to try to see if we can look forward, as well.
Now, let’s talk about — the next question is to talk about the subprime lending meltdown.
Who do you think was at fault? I start with you, Gov. Palin. Was it the greedy lenders? Was it the risky home-buyers who shouldn’t have been buying a home in the first place? And what should you be doing about it?
PALIN: Darn right it was the predator lenders, who tried to talk Americans into thinking that it was smart to buy a $300,000 house if we could only afford a $100,000 house. There was deception there, and there was greed and there is corruption on Wall Street. And we need to stop that.
Again, John McCain and I, that commitment that we have made, and we’re going to follow through on that, getting rid of that corruption.
PALIN: One thing that Americans do at this time, also, though, is let’s commit ourselves just every day American people, Joe Six Pack, hockey moms across the nation, I think we need to band together and say never again. Never will we be exploited and taken advantage of again by those who are managing our money and loaning us these dollars. We need to make sure that we demand from the federal government strict oversight of those entities in charge of our investments and our savings and we need also to not get ourselves in debt. Let’s do what our parents told us before we probably even got that first credit card. Don’t live outside of our means. We need to make sure that as individuals we’re taking personal responsibility through all of this. It’s not the American peoples fault that the economy is hurting like it is, but we have an opportunity to learn a heck of a lot of good lessons through this and say never again will we be taken advantage of.
IFILL: Senator?
BIDEN: Well Gwen, two years ago Barack Obama warned about the sub prime mortgage crisis. John McCain said shortly after that in December he was surprised there was a sub prime mortgage problem. John McCain while Barack Obama was warning about what we had to do was literally giving an interview to The Wall Street Journal saying that I’m always for cutting regulations. We let Wall Street run wild. John McCain and he’s a good man, but John McCain thought the answer is that tried and true Republican response, deregulate, deregulate.
So what you had is you had overwhelming “deregulation.” You had actually the belief that Wall Street could self-regulate itself. And while Barack Obama was talking about reinstating those regulations, John on 20 different occasions in the previous year and a half called for more deregulation. As a matter of fact, John recently wrote an article in a major magazine saying that he wants to do for the health care industry deregulate it and let the free market move like he did for the banking industry.
So deregulation was the promise. And guess what? Those people who say don’t go into debt, they can barely pay to fill up their gas tank. I was recently at my local gas station and asked a guy named Joey Danco (ph). I said Joey, how much did it cost to fill your tank? You know what his answer was? He said I don’t know, Joe. I never have enough money to do it. The middle class needs relief, tax relief. They need it now. They need help now. The focus will change with Barack Obama.
IFILL: Governor, please if you want to respond to what he said about Sen. McCain’s comments about health care?
PALIN: I would like to respond about the tax increases. We can speak in agreement here that darn right we need tax relief for Americans so that jobs can be created here. Now, Barack Obama and Sen. Biden also voted for the largest tax increases in U.S. history. Barack had 94 opportunities to side on the people’s side and reduce taxes and 94 times he voted to increase taxes or not support a tax reduction, 94 times.
Now, that’s not what we need to create jobs and really bolster and heat up our economy. We do need the private sector to be able to keep more of what we earn and produce. Government is going to have to learn to be more efficient and live with less if that’s what it takes to reign in the government growth that we’ve seen today. But we do need tax relief and Barack Obama even supported increasing taxes as late as last year for those families making only $42,000 a year. That’s a lot of middle income average American families to increase taxes on them. I think that is the way to kill jobs and to continue to harm our economy.
IFILL: Senator?
BIDEN: The charge is absolutely not true. Barack Obama did not vote to raise taxes. The vote she’s referring to, John McCain voted the exact same way. It was a budget procedural vote. John McCain voted the same way. It did not raise taxes. Number two, using the standard that the governor uses, John McCain voted 477 times to raise taxes. It’s a bogus standard it but if you notice, Gwen, the governor did not answer the question about deregulation, did not answer the question of defending John McCain about not going along with the deregulation, letting Wall Street run wild. He did support deregulation almost across the board. That’s why we got into so much trouble.
IFILL: Would you like to have an opportunity to answer that before we move on?
PALIN: I’m still on the tax thing because I want to correct you on that again. And I want to let you know what I did as a mayor and as a governor. And I may not answer the questions that either the moderator or you want to hear, but I’m going to talk straight to the American people and let them know my track record also. As mayor, every year I was in office I did reduce taxes. I eliminated personal property taxes and eliminated small business inventory taxes and as governor we suspended our state fuel tax. We did all of those things knowing that that is how our economy would be heated up. Now, as for John McCain’s adherence to rules and regulations and pushing for even harder and tougher regulations, that is another thing that he is known for though. Look at the tobacco industry. Look at campaign finance reform.
Since I am not entirely clear on your entire argument, I just want to address your characterization the arcane finical instruments. Secondly, given some additional information I think it will be clear that a lack of regulation is the source of the problem. In other words, I am arguing that it was not the instruments themselves that put our financial system in ruins, but rather the way they were used.
You point to the complexity of these finical instruments as the cause of the bursting bubbles. But that it not correct. Or at least I think that it is incorrect to claim that the complexity of CDOs is the cause. Rather, it is the complexity of CDOs that usually makes them very safe investments. Basically, a CDO is made up of a lot of slices of different types of mortgages. By diversifying the types of mortgages, it could be insured that even if something bad happened in one area of the country, or to a particular group, the overall investment would be safe. Moreover, the traditional data from mortgage backed securities showed that only 2% of people defaulted on their mortgages anyway. So the idea of bundling was a good idea. Complexity, as it turns out, is one way the capitalists can use the market to make money. (That being said, it seems that you criticism of complexity in the market and finance capital undermines your other value of free market economics.)
So, if it was not the structure of these loans that caused the problem, then what did? It was either a lack of honestly in evaluating these investments or pure stupidity (but probably the first). It is kind of a long story, but when all of this shoddy investment started there was a lot of money to be invested. At the same time Alan Greenspan kept the interest rate for federal treasury bonds at 1%. Looking for a higher rate of return, investors started looking to invest in these mortgage backed securities because they had a 5%-9% ROR. This was in 2003. After 2003, people started making lots of sub-prime loans. These are the stated income, or no income no asset loans, we have all been hearing so much about. As the safer mortgage backed securities sold out, demand for these types of CDOs was still high, so bad loans were made to meet this demand. Had the rules of loaning money been the same, or had there been some federal oversight, then likely there would not have been this problem.
Since the credit rating companies did not distinguish between the good loans and the bad loans all of the bundles/CDOs these things were complied into CDOs that were given a AAA rating. In the summer of 2007 the number of people defaulting on their mortgages rose exponentially, making it clear that these securities weren’t worth a fraction of what people thought. These assests should never have been given an AAA rating. Since banks backed up there capital, a.k.a. our money, with these toxic investments, we are all in trouble. You said ,“the business of the government should not be to regulate and rescue as much as it is to set ethical standards and punish criminals.” Conversely, the whole purpose of my diatribe is to show that had the government been regulating this would not have happen. How can the government’s purpose be to “set ethical standards” and not be to regulate? Regulation is an enforcement of ethics.
Wall St. certainly holds much of the blame. But the dichotomy you refer to between Wall St. and Main St. is a false dichotomy. Yes there are relevant differences between investment banks and financial lay people, but that is a false distinction because of the interconnectedness of the American finical system. What happens to them effects us, and not just a trickle down sort of way (especially for anyone with a pension, mutual fund, money markets, or stock). Your right in saying that much of America does not support this bill. But what you don’t say is that much of America doesn’t know anything about the banking/financial system. On the other hand, Ben Bernake is not only a scholar of the depression, but he also is the one who helped Japan get through their banking turmoil in the 1990’s. Everyone is talking about the savings and loans crisis and the Great Depression, but the best analogy to what is going on now are the bank collapses in Japan. So I am going to go the virtue epistemology route here (as opposed to your populist perspective) and say that Bernake is one of the best people to have on the job at this point in time. (George Soros is someone I’d like to see brought on board here too). None the less, the bail out passed…more still needs to be done to keep people in their homes to stem the fall of home prices, but something had to be done.
The major source of this information is from “This American Life”, The Global Pool of Money. Although Diane Rehm has covered this same information a lot. Corroborating information can also be found on NPR’s “Fresh Air”, on their program about the shadow banking system.
To All,
Here are some interesting articles concerning the so-called “financial crisis”.
(1) “The Great Bank Robbery of 2008”: http://mises.org/story/3132
(2) “Too Tasty to Fail”: http://mises.org/story/3125
(3) “The Rescue Package Will Delay Recovery”: http://mises.org/story/3131
(4) “The Idiocy of Wall Street: Applauding Its Own Demise”: http://mises.org/story/3117
(5) “The Housing Bubble in 4 Easy Steps”: http://mises.org/story/3130
And, for a more in-depth read (6) “The Bailout Reader”: http://mises.org/story/3128
Enjoy,
Aaron
I don’t think letting the system fail is the answer. Wall Street makes some big risks, but they have paid alot already. As Bush said, “This sucker might go down.” If it does, we are all in a world of hurt.
This system will fail and soon. Part of the cause of that failure will have been this bailout. It is clear what has been done, many of us do it.
We have a credit card, and we run it out. Then we transfer the balance to another credit card, and then we run the first one up again. Eventually we run out of credit and then it is mashed potato sandwiches for lunch and maybe dinner for a long time. This will happen to this country, and soon.
I was encouraged (this was the last vestigial wisp of naïveté in my tortured soul, Amy) when all those boys in the Congress voted against the bill. Woo hoo! That is what my party is supposed to be about. I don’t care if we had to go back to horse and buggy, or I had to go back to being a line cook, if I could get the government to stop, just stop and dismantle the dozens of unnecessary agencies, cancel the hundreds of unnecessary programs, repeal the thousands of unnecessary laws, cut off the billions of dollars of foreign aid and military intervention that hobbles and drains the life out of this country. But of course the majority was bribed and they took the money in the form of pork.
Now these congressmen will tell you that the earmarks that they got for their district will benefit their constituency, but this is a bold faced lie. What they will do is benefit individual contributors first, and then maybe the voters later. Meanwhile, the congressman is funded and empowered.
The burden that has been taken on by our government will be passed to the taxpayer, if not in new taxes , then by reduced services, or an inflated currency. These men should be tried and hanged for treason, because they are selling their office.
Edgar,
You presume that government intervention in the market is the cure, when, and I think the data is clear about this, government intervention is the disease.
In short, the negative ramifications of continued state interference in the market (e.g., trading and credit regulations, the money supply, taxes and fines, etc.) will far surpass, in both duration and effect, the negative ramifications of the market simply correcting itself.
Amy,
when you say, “Regulation is an enforcement of ethics,” you could not be any more incorrect. Regulation is the result of a certain economic philosophy, not of an ethical position.
As for your diatribe concerning the causes of the “crisis”, you failed to address precisely why certain financial institutions involved themselves in subprime mortgage lending. Why, one should wonder, would institutions lend to individuals with a heightened risk factor of defaulting on the loan?
Could it be that the lending standards and risks of loan defaults for financial institutions were lowered by the State’s efforts to manipulate certain tax and other financial incentives to make home ownership more available to lower income individuals?
It seems that people who should not have received mortgages did, and this subprime crisis we are currently experiencing is the market’s way of correcting past wrongs.
Aaron.
From my post on this blog, a two sentence one at that, you assume that i think government intervention is always the answer?
I believe in the free-market, but not wild-west anything goes capitalism. This is the result of letting the reigns go too loose. No market can exist without some presence of government. I think this is the end of an era. The end of deregulation mantra.
Edgar,
You say, “No market can exist without some presence of government.” Well, then, such a definite statement such as that deserves some qualification, don’t you think? Do you care to explain to me exactly why a free-market cannot exist without some form of government? I’m very interested in what you have to say.
As for your accusation that I was presumptuous in saying you think government intervention is always the answer, how can you possibly say that when you state that a free-market cannot exist without some form of government?
Aaron
Aaron
Care to show an example of a economy without any government presence?
Edgar,
I see you have cleverly turned the tables on me! Ok, then, I will bite.
If you are asking if markets can and do exist independently of government, the simple answer is yes. Consider the following quote:
“At least 10 per cent of the world’s governments are classified as ‘weak or failed’ (Foreign Policy, 2006). In these countries, the state is so corrupt, fragile or otherwise dysfunctional as to create anarchic (as in the case of Somalia) or ‘near anarchic’ conditions. Citizens cannot rely upon the civil magistrate to uphold contracts or protect individual property rights. Furthermore, international market activity, which now comprises close to a quarter of world GDP (World Bank, 2005), has no overarching supranational authority to interpret or enforce commercial agreements. In these markets as well, government cannot be relied upon to create or enforce the rules of the game required for exchange relationships to thrive.
Nevertheless, markets, in both ‘weak and failed states’ and internationally, flourish.”
– Peter Leeson
“Institutional Analysis, Law and Economics, Public Choice, Social Change, Global Prosperity Initiative,” Mercatus
Books
There are historical instances of markets, civil society even, developing and flourishing without government, e.g. medieval Iceland. Here is an article with links to the various studies done on this topic: http://mises.org/article.aspx?Id=1121
Adam Smith, in his “Lectures on Jurisprudence,” noted that in 18th century England buying stocks by time (in our verbiage, futures) was against the law, but, however, people did engage in such trading. He says that, “in the same manner that laws against gaming do not hinder it, people continue to make these [future] trades,” and that even though such trades were not enforceable by law, that is, creditors could not seek the government’s assistance in ensuring the payment of debts, “yet the great sums that are lost [and owed] are punctually paid.” They pay, says Smith, because they, “must keep their credit.” If they do not keep their credit, then they will be considered “lame ducks” [Smith’s term] and people will be apt not to deal with them in the future.
In point, Smith was noting that there were economic transactions, and quite complex transactions at that, being conducted without any recourse to a government’s enforcement of those contracts, but instead on the self-interest and social reputations of the participating transactors.
As a note of further interest, you should also look into the history of the Amsterdam Stock Exchange, and the Dutch East Indies Company. The same economic phenomena were observed there, too.
Aaron
Edgar,
Now, explain to me exactly why a free-market cannot exist independently of government entities.
Aaron
Aaron,
Check out Catalonia, Spain during the Spanish Civil War for a more inspiring picture of “anarchic” conditions (as opposed to the somewhat unpleasant image of contemporary Somalia).
Mark,
Thanks. You are right, Catalonia during the Spanish Civil War does indeed provide a more pleasant example of “anarchic” conditions than modern-day Somalia.
I could have also given some examples from Weimar Germany in the 1920s. Even though a government entity existed, in many instances it was entirely ineffectual and almost non-existent. Which, I think, led to a period rich in art, philosophy, literature, film, etc.
Italy after WW1 and before Mussolini provided other, more pleasant examples, too.
Aaron,
I would argue that regulation is an enforcement of ethics because it establishes and enforces specific economic principles. Yes, regulation is part of economic philosophy but that itself does not preclude the possibility of regulation being meant to enforce standards that could also be ethical. Specifically, in the case of credit rating regulation was needed to make sure that CDO’s with a AAA rating deserved the rating. Enforcing truth, I think, is an ethical standard.
And I believe that I did address what caused the problem in the housing market. I am familiar with the bill passed by democrats who instructed Fannie and Freddie to lend to more minority borrowers. However, that bill did not give quotas and did not force lenders to lend to people who could not afford it. (It was meant to address the pervading racism in the housing industry- which I can provide academic sources to prove was a real problem). The motivation for this lending came from the high demand for mortgage backed securities. The lending standards were lowered because lenders believed that these loans were safe, because even if the low income borrowers defaulted on their loans the bank could sell the house in a market that was increasingly on the rise.
Perhaps it is true that the market is just correcting itself. But I don’t think that the invisible hand ought to just be allowed to run-a-muck…not at the cost of the entire world banking system.
Amy,
You miss the point. You begin with the assumption that government intervention in the market is necessary and desirable, both morally or economically.
I could not disagree more with your starting assumptions. To a point, I think the arguments (theoretical and empirical) upon which they are founded are deficient.
Aaron
P.S. Perhaps there were certain racist elements affecting loan decisions. I would argue that such decisions were not immoral. For neither you nor I, nor anybody else, has a “right” to another’s wealth. To suppose otherwise would be to suppose that you, or some regulatory body, is the final arbiter over how one distributes (via gift or trade) one’s wealth.
Aaron,
Check out “The Myth of Ownership” by Murphy and Nagel. I’m not endorsing it myself, but it provides a contemporary alternative to your positions on individual property, etc.
Mark
Mes (aka, Mark),
Thank you, but I have read it.
Aaron
P.S. I hope I did not come off as sounding curt, but I actually have read the work.
French President Nicolas Sarkozy, who convened the Oct. 4 meeting, called for a global summit “as soon as possible” to implement “a real and complete reform of the international financial system.” He said “all actors” must be supervised, including credit-rating firms and hedge funds. Executive-pay systems must also be reviewed, he said.
“We want a new world to come out of this,” Sarkozy said. “We want to set up the basis for a capitalism of entrepreneurs, not speculators.”
Interesting…
Aaron,
Every time I have this conversation with you I always end up with the same thought which is that I just don’t value unrestricted freedom the way that you do. It seems to me you only accept a definition of freedom as freedom from interference, and that I support a view of freedom which also acknowledges that people also have a right to do certain things. Frequently, you say that your opponent’s arguments are lacking in various ways, but I think that is only because you have pre-supposed values (especially in your view of freedom) which will not fit into any (or most) other ethical theories. You can criticize others and me for “missing the point” but the point is what is in question. I don’t think I have missed your points, I just don’t accept them. I think that you and most other people making ethical start with some initial values. You point out that my view is ethically remiss in that it allows one person to interfere with other peoples rights to conduct their businesses how they please. But all you are doing is pointing out that my view is not yours. Every time this discussion happens I don’t think that any ground can be because our two values systems are completely different.
As far as the macro-benefits or hindrances of the bail-out, I think that time will tell (forgive the cliché). Although it is important to note that there are many people, most importantly Bernake and Paulson, who are philosophically closer to your position but who where worried enough by the freezing of the commercial paper market they decided to take a left approach.
To piggyback on that point, I think it is possible to “value freedom” above all things as Aaron ostensibly does (I am a “jealous lover of human liberty” a la Bakunin) without necessarily committing oneself to a classical libertarian position as Aaron does. The ideology of the “Austrian school”, Ayn Rand, Robert Nozick, etc. is not the only ideology (or arguably the most effective ideology) towards maximizing freedom or liberty.
The writings of Mikhail Bakunin, Friedrich Nietzsche, Michel Foucault, (and others) all seem to support this possibility….
A recent study done by the World Economic Forum, The Global Competitiveness Report, may be relevant to this discussion…
http://www.npr.org/templates/story/story.php?storyId=95545749&ft=1&f=1006
Even though this study is not the last word on the fate of the various world banking intuitions, it does show certain virtues of tough regulation and restrictions on free market economics. Canada tops the list, but I think that the most interesting ranking on the list is Spain, which came in 20th. Spain suffered though two major periods of finical turmoil (one in the 70’s and one in the 90’s) and have since enforced trough regulation (specifically in the amount of money banks have on-hand and how they back up their assets, which is a contentious topic here in the states). Even though Spain is not immune to what is happening, it is proof that government intervention will not necessarily inhibit economic growth or in building a strong banking system. Although I don’t think that this will do anything to abate Aaron’s ethical concerns about government involvement in the market, I do think it shows that American free market capitalism is not the only way to create a strong, reliable banking system. I’ll also note that the US and the UK respectively came in at 40th and 50th- behind, among others, Malta, Namibia, and Chile.
Here is a news story by Comcast about the rankings as well:
http://www.comcast.net/articles/news-finance/20081009/BUSINESS-US-FINANCIAL-SOUNDEST-BANKS/
The top 20 and bottom 10 are posted.
http://www.cnn.com/2008/US/10/08/chicago.evictions/index.html
The last gasps of the roundly despised rentier class….
“Class” is such an ambiguous term. I wonder if it has- outside of revolutionary appeal- any meaningful signification. (This, of course, excludes its employment in the natural sciences and mathematics.)
The following appears to be Sheriff Dart’s primary concern: “I think the outrage on my part with them [is] that they could so cavalierly issue documents and have me throw people out of homes who have done absolutely nothing wrong. They played by all the rules.”
In saying that the landlords “cavalierly issue documents,” is Sheriff Dart implying that the many “legal” eviction notices that he serves are often illegally forged? I am inclined to suppose this is his meaning, because he says, “They [renters] played by all the rules.”What rules if not the rules stipulated within and by the rental contracts?
This does not seem like the “last gasps” of the rentier class…
Aaron,
I think the sheriff is responding to the fact that many people are being evicted from their homes (presumably a profound harm) because their landlords defaulted on the mortgage, instead of the landlord (the rentier) standing out in the cold with his stuff piled up, humiliated, homeless, etc……
The more of this kind of thing, the more people realize that speculation = parasitism. Which, of course, was the conclusion in the 1920’s of Feder, et al. My only complaint (initially, if I had one) was with the “half-assed” nature of Feder’s critique of Finance capital. And, of course, one way to complain is through the use of ad hominem devices (Feder = Nazi) which may or may not be unrelated to the actual nature of the complaint.
Regarding the “rules” in the rental contract….
“If the rule you followed led you to this, then of what use was the rule?”
(Anton Chigurh, “No Country for Old Men”)
Mark,
First, nice quote.
Consider the renter’s contract. It stipulates what a renter must do to inhabit the rentier’s property, e.g. the fee, the dos and don’ts, etc., and, likewise, the rentier’s responsibility to the renter. When the renter consents (we assume she is not being physically forced or threatened with physical force) and signs the contract, it is prudent to presume that she is making a reasoned decision and understands the full extent of the contract.
Of course, we may encounter certain problems with contracts. Perhaps the contract was incredibly vague, or is authored in specious terminology, or the renter couldn’t read, etc. These would all be good grounds for invalidating a contract.
However, more often than not, people are well aware of most of “rules” (and all that they imply) of most of the contracts they sign. If on the occasion the contractors, as Anton Chigurh intimated, find the “rules” were undesirable, then they likely to play by new “rules” next time.
Amy,
There is no such thing as an “American free-market;” that idea is a fiction. We really ought to stop referring to regulated markets as “free-markets”. Here is an article germane to what I mean: http://mises.org/story/2840
As for the study you cite. What criteria are employed to derive its conclusions?
No matter. Here is a more thorough study on world economies conducted by The Heritage Foundation called, “Index of Economic Freedom 2008.” http://www.heritage.org/Index/
I should note that while The Heritage Foundation is a conservative, capitalist think tank, they are not proponents of laissez faire capitalism. (Nor am I a fan of their social conservatism.)
Another resource material to the issue at hand is the Cato Institute’s report, “Economic Freedom of the World.” http://www.cato.org/pubs/efw/
I find this report to be more thorough than The Heritage Foundation’s.
I do not anticipate that you will click on these links, let alone peruse the reports, but it is enough that you are made aware (if you are not already) of other, better analyses besides those gleaned from NPR. You and I could go on forever exchanging links to various reports supporting our economic world-views, but I would rather not do that.
As for my ethical presuppositions. I eagerly await the opportunity to discuss them in person with you. I always look forward to incisive criticism; I hope you do, too.
P.S.
Mark, please excuse my horrible grammar in my previous post.
Aaron,
Why would you think that I wouldn’t even click on your links? I did look at them, but I think that the World Economic Forum has a more complete study. The study I posted was NOT done by NPR, it was just reported by them. So I would say that your statement, “better analyses besides those gleaned from NPR” is not really an accurate description of the information I posted.
The study I cited is done by the World Economic Forum, and their data comes from a variety of sources, just go to their main web page for the details on how the study was conducted. The thing I really like about this study is the detail. I did look at the studies you provided, but it didn’t seem to me that they had a comparable volume of information.
Here is a direct link to the study I cited: http://gcr.weforum.org/gcr/
But if you click the ‘index’ button a drop down menu will pop-up and there are 50 or more different rankings from how much countries trust their politicians to the effect of terrorism on economies to innovation and science technology(in addition to the freedom of various economies). The breadth of this study is really why I think it is better than those done by the CATO institute or by the Heritage Foundation.
I do not mind criticism; I defiantly would not even bother talking to you if I did. Anyway, I already gave you my number, if you want to talk in person just give me a call.
P.S. I agree that there is no American Free Market- and that regulated markets are not free. I was just not being careful enough with my language when I said that…
Not to beat this point to death, but I heard again today a well-respected political commentator note that the “new administration” should be focused on rewarding “engineers” who actually “create something” and focus on channeling the next generation of the “best and brightest” into “physical engineering” and away from “financial engineering” whose practitioners “create nothing”.