Quote:
Originally Posted by Metro-One
And to Prometheus, if you want to see what a complete free market does to an economy look to our south....rules and regulations are what have saved the Canadain [sic] banking system from crashing, and the same is true for realistate [sic].
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Since this takes us off topic, I will confine myself to one response only:
If you care about the truth, you need to start by actually studying your subject.
There is absolutely nothing about the U.S. financial industry or the U.S real estate industry that resembles a free market. Each of those industries is subjected to a dizzying array of government regulation and interference, both at the state and federal level. The most cursory examination of the subject will tell you this.
The real estate bubble in the U.S., and the financial crisis that followed its collapse, were a direct result of the moral hazards created by U.S. government meddling in the economy, from the Federal Reserve (which kept interests rates artificially low, thereby discouraging savings and encouraging borrowing and speculation), to the Community Reinvestment Act (which encouraged subprime lending by imposing legal liability on banks whose lending policies "discriminated" against lower income persons), to the creation of the two government sponsored enterprises, Fannie Mae and Freddie Mac (whose mission was to carry out the government's social policy of greater home ownership among lower income persons by acting as a buyer of the millions of subprime loans that the government was encouraging the banks to make, securitizing them and selling them to the major financial institutions). Add to all of that the implicit government policy of "too-big-to-fail," which effectively neutralized the most powerful free market-based corrective of bad business management: bankruptcy.
Thus, the failure of the U.S. financial and real estate markets was a failure of the
regulated economy, not the free market. Indeed, it is the discipline and corrective forces inherent in a free market which
prevent the very moral hazards that directly led to the housing bubble, its collapse and the financial crisis that followed.
By the way, one of the freest industries in the U.S., i.e., the industry that most resembles a free market, is the high-tech industry, which brings us computers, iPads and smartphones, which get more powerful and less expensive every single day. Thus is the relationship between freedom and creativity.
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That still does not make it any less disgusting of a practice. Along with being a huge slap in the face to the people who actually call this city home, and are struggling to buy a place for themselves in this over priced hyped market.
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