...

The gift of Austrian economics in part is to provide with a scientific explanation via marginal utility about how this process works. Absent marketplace competition and the invisible hand, there is simply no way that capital will find the appropriate channels. It is impossible. State planning simply cannot determine where money should flow with any certainty - though in fact the state planning process is not really concerned with such things, being basically a political apportionment.

...

We would urge readers of the Daily Bell to seek out the work of such free-market philosophers as Tibor Machan because the rational appraisal of state duties is at the heart of the conversation about freedom. One can hardly be a responsible citizen in our estimation (and many are not) without considering these issues. Machan has spent a career enumerating them and we are grateful for his efforts in this area and for the publications by him and his colleagues that continue to shed light on the important and controversial boundary line between "citizen and state."

...

You can't point out that we are all going to die when your readers are suits and your advertisers depend on Greater Fools investing. Yet even given that, I couldn't help but think what optimistic fools they were when I came across an October '08 issue at the library free magazine rack. Page 52 had a graph depicting the Dow and how much value it had lost over the last century. A decline of 89% during the Great Depression. 42% during the early '70's oil embargo. 33% October '87. A mere 17% decline when LTCM went under in '98. The Dot Com bust saw a loss of 34%. And the housing bubble through last fall saw the Dow down 21%. The graph was screaming out how safe we were since we were so far from the declines of the Great Depression. Now, fast forward to February 2009. The Dow has lost just under a shade of 50%. That is worse than the '70's oil embargo. And over half way to the losses in the Great depression.

How can we the people get enough clout to take on the giant financial and corporate giants? What can we do that will make politicians sit up and take notice?

How about swarming the courts? New case law indicates that a majority of the 750,000 homeowners expected to lose their homes this year could have a valid defense to foreclosure. As much as $2 trillion in real estate may be vulnerable to this defense, providing a very big stick for a lobby of motivated debtors...

When the embattled banks demand a bailout because they are “too big to fail,” the taxpayers can respond, “You have already failed. It is time to try something new.”

... If there is no signed mortgage note or recorded assignment, foreclosure is barred. The defendant must normally raise this defense, and most defaulting homeowners, unaware of legal procedure and concerned about the expense of hiring an attorney, just let their homes go uncontested. But when the plaintiffs bringing subprime foreclosure actions have been challenged, in most cases they haven’t been able to produce the notes.

Socialism cannot compete!
206 Comments

Oct 13 06:22 PM

THANK YOU!! I've been saying this for the last few weeks, as the bailout was debated, passed, and then as we've watched the market dive-bomb last week...this notion of needing to grease the wheels for credit is *completely* backwards!! Too much credit is what got us here...it's time to deleverage, and that has to start at the grassroots...those who are trying to pay their mortgages and account for 2/3 of GDP!! Middle-America has been attempting to do so with the overhead of 30-40% federal taxes...and now, the misguided bailout will cause an increase in that, as well as *inflation*!!

Not the answer. Deleverage by *massive* spending cuts, accompanied by *massive* tax cuts. They claim this is not the answer...but that's because lending is how banks make money -- and the goal here is not to make banks money, but to get Americans out of debt so they can begin spending money that is free-and-clear...truly discretionary...rather than spending borrowed money!! Then and only then, have we bottomed!!

The root of the problem is that we ever got into credit-based living to begin with: the banking industry is much bigger than it ever should have been, because we should not have ever *needed* to be borrowing...at least anywhere near the extent that we do. Why do we just take for granted that in order to own a home, we will need a mortgage?? My grandparents were poor: lower-middle class at best, but they worked and saved and bought their (very small) house outright. It is hardly possible to do so any longer. I blame the humongous growth of taxation and the bloated, corpulent behemoth that we call the federal government. And now they want to do us one better, and have the wise among us who didn't buy what we couldn't afford help pay the difference in the mortgages of those facing foreclosure!!

Enough. End the bailout. Kill the Fed. Cut the government to the core. They clearly don't know how to manage an economy. Just give us *OUR* money back -- I'm willing to bet we know what to do with it!!

let's step back and ask ourselves why it is we need an office of Secretary for Financial Stability in the first place.

The answer is we have an unsound banking system based on fractional reserve lending, compounded by micromanagement of interest rates by the Fed, and runaway spending in Congress.

To date, I have not heard one single sentence from anyone important enough to matter, about what really went wrong and why. Instead we have yet another governmental body attempting to add "financial stability" while doing nothing to address the root cause of this mess.

The worst part is the Fed and the Treasury have decided the problem is that banks are not lending enough. The reality is that banks have lent too much.