Ph.D. Twit

This article caught my eye this morning. In arguing against free market ideology the writer states:

Here are some of the inflexible, hardcore beliefs that are crashing along with the stock market: “Individuals always know best.” Not so much, it turns out. The whole financial crisis is rooted in irrational personal decisions. Consumers borrowed more than they could afford based on the naive assumption that housing prices would always go up. Not just a few people — lots and lots of them.

Many people made dumb mistakes. So what? We now create regulation to do what? Stop people from shooting themselves in the foot? Come on! Sure, there are some things to fix, but you can’t stop people from being greedy and fearful. No way, no how.

12 thoughts on “Ph.D. Twit

  1. the whole argument is just bad rhetoric, riddled with equivocation, weasel words, informal fallacies. Good to know you can receive a doctorates degree and not use logic properly. If I thought his opinions were right on, I still would think his argument is feckless.

  2. I don’t know if individuals know best, but by the mutual fund industry’s own admission, 70% of the fund managers *underperform* the market. It does give one pause, yes?

  3. “According to press reports of the testimony, Greenspan told Congress that he “had put too much faith in the self-correcting power of free markets.” That’s no small statement”

    So what is the problem Mr. Greenspan, the market is actually making a correction as you belief in the free market. The correction is the collapse of the financial system.Now the system is working back to normal.


  4. And to think; If there are to be new regulations they will be enacted by people who we cannot stop– from being greedy, fearful, no way, no how……

  5. I’m troubled by the emerging idea that over the past couple months “it has been proven” that “free-markets don’t work.” No one ever said that free-markets produce smooth, consistently pleasant outcomes. It’s quite the opposite: markets constantly overshoot, resulting in a jagged, often-painful trajectory for human enterprise. We are currently living through the readjustment resulting from the over-allocation of capital to the housing sector. The fact that we’re experiencing pain is not evidence that the system is broken, but that the system is working! Unfortunately, we now have legislators (with the electorate acting as a willing accomplice) who feel we’re entitled to a pain-free lifestyle. The fact remains that free-market capitalism, despite its turbulence, is the single best mechanism we have to allocate the world’s scarce resources.

  6. The government dropped rates to 1% following 9/11. That was the ignition for the credit bubble. Free market capitalism can’t be held responsible for those political decisions. Freddie and Fannie supporting the notion that everyone should have a house? Free market capitalism is not responsible for that either.

  7. Have non-free markets ever produced anything worth having? People stood in long lines in the USSR to get government produced shoes that didn’t fit them so that they could sell or exchange them in the black (free) market for somthing they did need.

  8. No one wants to look into a mirror because most individuals do not want to take responsibility for their actions. It is not about free markets, its about being responsible for your own actions.

  9. Another Liberal Fascist heard from. Naturally he is in a “teaching” environment where he can indoctrinate the young and inexperienced to follow the socialistic agenda.

  10. When did life become fair? As long as we are starting from the same place, the system is working. It’s upto the individual to determine what the end looks like. If we allow government to take away free markets, the. We might as well stop trying to do he best we can for ourselves. The. What hapens?

  11. Where is the Free Market capitalism in the US ? I’d rather described this as an oligarchy capitalism.

    Back in 2000, when Hank Paulson was CEO of GS, he testified in front of the Security and Exchange Commission. Among other things, he lobbied the SEC to enact a “change to self-regulation” for Wall Street. He also urged them to change the “net capital rule” which governed the amount of leverage investment banks could use. The net capital rule was indeed changed in 2004, and is now blamed for the investment banks’ collapse.
    The SEC can blame itself for the current crisis. That is the allegation being made by a former SEC official, Lee Pickard, who says “a rule change in 2004 led to the failure of Lehman Brothers, Bear Stearns, and Merrill Lynch.” The SEC allowed five firms – the three that have collapsed plus Goldman Sachs and Morgan Stanley – to more than double the leverage they were allowed to keep on their balance sheets and remove discounts that had been applied to the assets they had been required to keep to protect them from defaults.

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