Russ Roberts’ testimony in front of the House Committee on Oversight and Government Reform is superb. Read it (it’s short). Wall Street deserves plenty of blame for the financial crisis. But Washington deserves more:

When your teenager drives drunk and wrecks the car, and you keep giving him a do-over—
repairing the car and handing him back the keys—he’s going to keep driving
drunk. Washington keeps giving the bad banks and Wall Street firms a do-over. Here are
the keys. Keep driving. The story always…

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Here’s my letter published in the Oct. 25th edition of the Boston Globe responding to an editorial advocating the creation of a Consumer Financial Protection Agency:

Your editorial, “To Fix Financial System, Protect Consumers First”, claims that a Consumer Financial Protection Agency will prevent a “recurrence” of the “financial pathology” that caused the banking crisis. But the source of that “financial pathology” was bad government policy, and your editorial calls for more of it.

Government subsidized toxic mortgages through entities like Fannie Mae and mandated…

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Unemployment has risen to 9.8 percent, a 26-year high.

That’s much higher than the Obama administration predicted unemployment would rise, if Congress had refused to pass his $800 billion stimulus package.  The administration claimed unemployment would rise to 8 percent without a stimulus.

Small businesses are finding it more difficult than ever to borrow badly needed money to meet their payrolls.  New financial regulations backed by the administration are contributing to a terrible credit crunch.  Meanwhile, the wealthy Wall Street investment bank Goldman Sachs, perhaps the…

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Welcome to Episode 33 of the LibertyWeek podcast, with your hosts Richard Morrison and Cord Blomquist and technical producer (and this week’s special guest) Ryan Young. After bidding our friend Thor Halvorssen a very happy birthday, we get a fresh recap from Ryan Young on the events of the Free State Project’s recent Liberty Forum in Nashua, New Hampshire (photos). Google’s CEO spurns Twitter (transcript via TechCrunch) in Technology News, John McCain and Richard Shelby say that the government should end the bailouts and…

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This week, host Cord Blomquist and co-host William Yeatman, along with guest commentator Ryan Young (Richard Morrison is off this week) take a whiff of the bank nationalizations floating through the air, and say they stink. Sen. Chris Dodd’s dodgy dealings in real estate come under scrutiny. Rep. John Murtha has a few multi-million dollar skeletons hiding in his own, heavily gilded, closet. Climate czar Carol Browner declares war on the economy. While favoring immigration in general, our hosts question…

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Such is the title of the latest BusinessWeek.com debate. Taking the “con” side is CEI’s own Eli Lehrer, who argues (in part):

Long-term government bank ownership, in any case, would simply make the country poorer. Banks actually create money when they lend it out, but doing so only has positive overall economic consequences when the loans get repaid. Government-owned banks would face enormous, understandable pressure to lend to politically powerful groups and industries that can’t reasonably repay their loans. Even the…

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Our friends at the Ayn Rand Center for Individual Rights are hosting what promises to be a fascinating public lecture on the state of the U.S. economy and what it means for the future of capitalism. Former CEO and current Board Chairman of BB&T bank, John Allison, will explain the interventionist government policies that brought us where we are today and their anti-capitalist underpinnings.

Location and Details:

The Financial Crisis: Causes and Possible Cures
Thursday, January 29, 2009

National Building Museum—Great Hall
401 F Street NW
Washington,…

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For supporters of freedom and markets, the Year of Our Lord 2008 has been close to a disaster. As D:Ream used to sing, things can only get better, surely? Ah, if only…

This was the year that saw two Presidential candidates vying with each other to see who could make the most ridiculous statements on global warming and the financial system (it may be the less ridiculous won). It was a year when one bunch of free-spending economic know-nothings gained complete…

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The threat of deflation is so big in the UK, where they have found their version of the financial crisis worsened by the weakness of sterling and the size of government, that a former Treasury adviser is suggesting they need to think about printing money.

Meanwhile, Rich Lowry quotes AEI’s Peter Wallison about Hank Paulson’s latest u-turn:

The problem is that these shifts in direction have caused investors and others to lose confidence that Paulson knows what he’s doing, and that in itself…

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Major newspapers around the country including the Washington Post, the LA Times, and the Wall Street Journal are urging President-elect Barack Obama to pass the U.S.-Colombia Free Trade Agreement in the lame duck session. The Los Angeles Times said it bluntly, “It’s time to stop playing games with a trade pact whose economic and political benefits are good for both nations.”

Some reports of the meeting between the president-elect and President Bush said that the president had pushed for the trade agreement in exchange…

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Prepare yourself for the latest episode of the best free market podcast around, LibertyWeek.

Your hosts Richard Morrison and Cord Blomquist discuss the looming presidential election, Halloween, the conviction of Alaska Sen. Ted Stevens, the continuing economic unease, tough times for the U.S. Postal Service, American companies react to Internet censorship abroad, Cox’s new wireless service, Microsoft’s new web-based OS Azure, and all the finest Olympic News.

Listen now!

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We’re hearing from a variety of sources that Jamie Dimon, the CEO of JP Morgan Chase, has agreed in principle to be Obama’s Treasury Secretary. Dimon worked hand-in-glove with Hank Paulson over the Bear Stearns bailout. The new boss, it appears, will be the same as the old boss.

Looks like the revolving door between Wall Street and the Treasury Department ain’t going to stop any time soon.

In a related note, the excellent Capital Research Center, which has done so much good…

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It’s been called a ticking time bomb by Investor’s Business Daily. CNNMoney asks if this will be the next disaster. Yet the Feds are delaying one key in bringing stability to our financial markets.

As a $62 trillion dollar over the counter market, CDSs need an exchange or central clearinghouse to provide transparency and collateral requirements. CME (formed from the Chicago Board of Trade and the Chicago Mercantile Exchange) and the Clearing Corp (formed from 17 financial players including UBS and Goldman…

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There are all sorts of people today who normally talk about free markets but who have got themselves into a tizzy over the failed bailout. We need to get one thing straight - the bailout was the wrong answer to the wrong question. To begin with, the plan was merely postponing the inevitable, as a letter in the Wall Street Journal pointed out this morning:

The lesson of past financial inflection points is that we must let the markets reallocate capital from…

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Oh, Happy Day! And it certainly is for all those who value freedom, responsibility and the true free market in which individuals are free to profit from their risks on the condition that they don’t stick the rest of us with their losses.

It’s not hyperbole to say the Republican and Democratic backbenchers who defied both parties’ leadership to defeat this $700 billion package of Wall Street socialism literally saved America. Whatever their reasons, this defeat (or rather victory for freedom),…

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Though the bill may have been defeated for the wrong reasons—like the lack of freebies, giveaways, and handouts that many on the left had hoped for—the defeat of the bailout bill in the House has brought stocks out of their decent. The Dow Jones is now climbing.

But how can this be? How could a bill that was designed to save our economy, our country, and the world be the cause of the Dow’s drop today? Easy, the bill was introducing…

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The House of Representatives just voted down the $700 billion corporate finance bailout, despite earlier urging from President Bush to push the measure through. Look for in depth analysis from our very own John Berlau and the rest of the policy team as the day progresses. Read CEI’s roundup of the continuing finance crisis (and sign up for email updates) here.

NEW: John Berlau responds (and speaks!) in reaction to today’s vote. Updated post and audio clip here.

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Time magazine contributors Andy Serwer and Allan Sloan give us an article in the latest issue meant to explain what is going own with the current financial crisis (better explained here).    Serwer and Sloan, for all their “combined 65 years of writing about business” can’t seem to produce any coherent or unbiased reporting on this crisis and the reasons for it.  They just fall back lazily on an argument that has been circulating the last few days, placing the blame at the…

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