Let Them Fail

Ayn Rand Center for Individual Rights ^ | 31 Oct 2008 | Amit Ghate

[CE2949BB]

Everywhere today politicians are blaring that they must save America's financial institutions, alleging catastrophic risk to the economy were any to fail. Paulson and the entire Bush administration, in a discernible panic, are now pouring $700 billion into the big banks, having already bailed out AIG, Fannie Mae, Freddie Mac, and Bear Stearns to the tune of $300 billion.

Capitalism doesn't work, they declare, but fortunately the government is here to rescue us.

Sadly, they have it all backwards. The credit crisis is just more evidence that whenever the government supplants the free market and attempts to "manage," i.e., control, the economy--disaster ensues.

[markedmannerf]

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[Man50D]

They're not trying to save anything. The socialists are using the sky is falling excuse as a pretense to impose more regulations as one of many means to control the people.

[allmost]

The corporate welfare bill has already been passed and they are spending it as fast as they can. There was an earlier thread on this subject. It was more speculative solutions oriented.
http://www.freerepublic.com/focus/f-news/2121137/posts

[allmost]

With all due respect I don’t think Ayn Rand would have a clue as to what a credit default swap was. This is an unbelievable mess. I believe they should have let the institutions fail, but it’s already done.

[utahagen]

You’re surely right that Ayn Rand wouldn’t know “what a credit default swap” was. However, Rand’s point would have been that it doesn’t matter what the products are; the principle is that a free market allows the economy to adjust to failures more effectively than government intervention does. I am dreaming of a libertarian revolution.

[since1868]

BTT

[allmost]

Let me say a few things in response. You can easily click on my profile and see that I was all for letting them fail. The bailout is a done deal, therefore how to mitigate the fallout/expense and how to prevent this from happening again are the basic, realistic concepts. I want you to respond to this, if you will, before I ask you another question.

[PGalt]

Very good post. Never confuse capitalism with criminality. The CDS, the socialization of risk squared (or cubed...take your pick), is not capitalism.

[PGalt]

Here’s a link to a good read...

http://www.webofdebt.com/articles/derivative-disaster.php

[PGalt]

The supremacy of finance capital over all other forms of capital means the predominance of the rentier and of the financial oligarchy; it means that a small number of financially “powerful” states stand out among all the rest. The extent to which this process is going on may be judged from the statistics on emissions, i.e., the issue of all kinds of securities. - Vladimir Ilyich Lenin

[PGalt]

From Frederic Bastiat’s - “The Law” - Property and Plunder...

Man can live and satisfy his wants only by ceaseless labor; by the ceaseless application of his faculties to natural resources. This process is the origin of property.

But it is also true that a man may live and satisfy his wants by seizing and consuming the products of the labor of others. This process is the origin of plunder.

Now since man is naturally inclined to avoid pain — and since labor is pain in itself — it follows that men will resort to plunder whenever plunder is easier than work. History shows this quite clearly. And under these conditions, neither religion nor morality can stop it.

When, then, does plunder stop? It stops when it becomes more painful and more dangerous than labor.

It is evident, then, that the proper purpose of law is to use the power of its collective force to stop this fatal tendency to plunder instead of to work. All the measures of the law should protect property and punish plunder.

But, generally, the law is made by one man or one class of men. And since law cannot operate without the sanction and support of a dominating force, this force must be entrusted to those who make the laws.

This fact, combined with the fatal tendency that exists in the heart of man to satisfy his wants with the least possible effort, explains the almost universal perversion of the law. Thus it is easy to understand how law, instead of checking injustice, becomes the invincible weapon of injustice. It is easy to understand why the law is used by the legislator to destroy in varying degrees among the rest of the people, their personal independence by slavery, their liberty by oppression, and their property by plunder. This is done for the benefit of the person who makes the law, and in proportion to the power that he holds.

Thanks to FReeper raygun for the link.