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February 10, 2012
Lisa M. Krieger: Man with defibrillator demands access to his own heart's information
David G. Savage: Why activists may not be in a hurry to have High Court rule on alternative marriage
February 9, 2012
Laura McMullen: 10 Least Expensive Public Schools for Out-of-State Students
Kimberly Palmer: How to actually enjoy -- relaxing, financially -- your vacation
February 8, 2012
Warren Richey: Why momentous Prop. 8 ruling might not satisfy gay-rights groups
Menachem Wecker: Though Controversial, LL.M.'s Can Lead to Specialized Legal Jobs
The Kosher Gourmet byDana Velden: Going to the bother of making soup? You know it better be good. This CREAM OF TOMATO SOUP certainly is! And it's a cinch to make, too (Includes techinques and serving secrets)
February 7, 2012
Frank J. Gaffney, Jr.: Caught off-guard? President's Super Bowl interview with Matt Lauer gives those who need a reason not to vote for him, a darn good one
Suzanne Bohan: Leaping lizards! Tiny reptiles advancing robot design
February 6, 2012
Jonathan Tobin: Iran Threatens Israel With Destruction, But the New York Times Doesn't Hear It
Jeffrey Fleishman: In newly democratic Egypt, tens of democracy activists jailed, to stand trial; their groups are 'threatening the stability of the homeland'
Julie Deardorff : Researchers say antioxidants may not be that effective and could do more harm than good
Mark Clayton: How did Anonymous hackers eavesdrop on FBI and Scotland Yard?
February 3, 2012
Edmund Sanders : Israeli official says Iran is creating missile that could reach East Coast of US
Victoria Kim: Immigrant-smuggling ring used black drivers to avoid racial profiling
February 2, 2012
Jim Carney: Wrong number call may have saved her life
Reza Kahlili : Ex-CIA spy in Iran's Revolutionary Guard: What Obama doesn't grasp about striking deals with Tehran
Tina Susman: For woodchuck rescuer, every day is Groundhog Day
February 1, 2012
Brian Bennett: US officials see increasing threat of domestic attack from Iran
Emily Brandon: How to Take Advantage of New 401(k) Fee Disclosures
January 31, 2012
January 30, 2012
Paul Richter and Ramin Mostaghim: Misreading Teheran's limits -- deadly and economically devastating as they may be -- is a risk administration, Europe seem willing to take
Suzanne Bohan: Warning: Nap-deprived tots missing more than sleep, study finds
Meg Handley: Banks Revamping Rewards Programs to Woo Customers
January 27, 2012
Caroline B. Glick: Obama: Of course I intend to prevent a nuclear holocaust . . . in a few months
Yochonon Donn: In liberal New York City, fervently-Orthodox Jews may soon be getting a district to call their own
Jeannine Stein: An inflated ego and thinking you're 'all that' doesn't just make others sick of you, it can make you ill
Katy Hopkins: New budget rules may affect how much money you get for college
January 26, 2012
Ed Koch: To the New York Times, calling for the murder of Jews by those capable of having their incitement taken seriously isn't news
Jeannine Stein: Mental illness struck one in five U.S. adults in 2010: Report
January 25, 2012
Richard Simon: House passes two bills endorsing the use of religious symbols at military memorials
Fred Weir: Putin: Multiethnic Russia cannot survive as a US-style 'melting pot'; must find its own way
Susan Johnston: 5 Sneaky Coupon Strategies Consumers Should Watch Out For
January 24, 2012
Carol Clark: The price of your soul: How your brain decides whether to 'sell out'
Caroline B. Glick: America lost most in 'Arab Spring'. Sadly, many voters still don't grasp the extent
Warren Richey: Drug criminal scores win in GPS ruling from conservative-leaning high court
Erika Bolstad: Black conservatives gather to talk about gaining strength
January 23, 2012
Melissa Dribben: Jewish voters to play a key role in Florida's Republican primary
Jordan Rau: In quest to grow, Catholic hospital system will announce this morning its break from church
Ali Safi: U.S. envoy gives Taliban terms for peace talks
January 19, 2012
January 18, 2012
January 17, 2012
Frank J. Gaffney Jr.: No-kidding red lines: U.S. response to an Iranian nuke may be bluster, but Israel's won't be
David G. Savage: They sued their principals after slandering them online --- now the cases are headed to the Supreme Court
David Francis: Where to Invest in 2012: With stocks expected to rebound, opportunity abounds for investors
January 13, 2012
Ben Lynfield: Israeli lawmakers move to annex Jewish Judea, one museum at a time
Alexia Elejalde-Ruiz: Thriving through touch: Gentle massage helps older people with low mobility improve in mind and body
January 12, 2012
Warren Richey: Landmark Supreme Court ruling a 'resounding win' for religious groups
Warren Richey: Supreme Court says no to new rule on eyewitness testimony
John Fauber : Statins found to raise diabetes risk in postmenopausal women
Katy Hopkins : Consider This Before You Pay for an Online Degree
The Kosher Gourmet by Joseph Erdos: This mushroom and barley soup has an intense -- almost nutty -- flavor that mixes robust with Middle East. It has creaminess without cream
January 11, 2012
Shari Roan: Millions of atrial fibrillation sufferers at risk for devastating, but preventable, stroke
Tom Hussain: Pakistan -- recipient of more than $21 billion in civilian and military aid -- speeds pursuit of Iranian pipeline, defying US
David G. Savage: High court signals it won't be loosening TV's 'indecency' rules
Stephen Ceasar: Oklahoma's Islamic law amendment can't go into effect, court rules
January 10, 2012
Reza Kahlili: From an ex-CIA spy: US must exploit new split in Iran's Revolutionary Guard
Karen Kaplan: Study: Nicotine replacement products ineffective when used in real-life situations
January 9, 2012
Michael Doyle: Put through legal hell over dream home, couple fought back hard --- all the way to Supreme Court
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Jewish World Review
Sept. 24, 2008 / 24 Elul 5768
What happened to market discipline?
By
John Stossel
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http://www.JewishWorldReview.com |
Barack Obama says, "[Today's economic problems are] a stark reminder of the failures of ... an economic philosophy that sees any regulation at all as unwise and unnecessary".
What? Does that mean that until last week the Bush administration embraced the free market? Nonsense. Governments at all levels have regulated and subsidized the housing and financial industries for years. Nothing changed under President Bush.
The government-backed Fannie Mae and Freddie Mac were created precisely to interfere with the housing and mortgage markets. In effect, Freddie and Fannie diverted money to people who wouldn't have qualified for mortgages in a real private market.
Had actual private companies performed these activities, they would have been subject to market checks. But they were not. The results were predictable.
Now that it's all tumbling down, the politicians and pundits blame the free market.
It's not simply misunderstanding. It's demagoguery by people who will never admit that their "progressive" social policies have spawned a taxpayer bill that boggles the mind.
This is a story not of private enterprise but of cynical political opportunism. Moral hazard the poisonous mix of private profits and taxpayer-covered losses is what you get when politicians indulge their hubris to redesign society. The bailout of those companies holding bad mortgages big-business socialism sets us up for the next crisis.
Maybe the Republican presidential candidate will dissent? Not a chance:
John McCain says, "We are going to fight the greed and irresponsibility on Wall Street. These actions [leading to crisis] stem from failed regulation, reckless management and a casino culture on Wall Street. ... We need strong and effective regulation ... ".
He proposes a new bureaucracy, the Mortgage and Financial Institutions Trust (MFI), which he says will "provide troubled institutions with an orderly process to identify bad loans, provide funding and eventually sell them at a profit. ... The MFI will supervise the sale of loan assets at market prices and purchase them as necessary" (emphasis added).
A government agency is going buy bad loans and make a profit selling them. Give me a break!
Irresponsibility induced by government-created perverse incentives is the culprit. For decades politicians of both parties have relieved big companies of the responsibility that market discipline would have imposed. The promise explicit or implicit to bail out companies "too big to fail" weakens market discipline. That invites recklessness.
What if the government cut Freddie, Fannie, Bear, AIG and the others loose and let them do what other businesses do on hard times: renegotiate with creditors and revalue assets? Would there be another Great Depression? Not likely. What turned a recession into the Great Depression was the Federal Reserve's contraction of the money supply. I doubt they'd make that mistake twice.
Public officials say the big companies must be saved to prevent a devastating credit "lock." Really? Without a federal bailout, lending wouldn't have resumed? The market wouldn't have sorted it out? Prices wouldn't have found a more solid floor? We'll never know.
We do know that the taxpayer will buy Probably for too much money, because the private sellers will fool the government managers at least $700 billion in "illiquid" assets. Where will this money come from: taxation, borrowing or the printing press? What will that do to our economic well-being?
Crisis is the friend of the State. The politicians are desperate to be seen as "showing leadership," so we're surely in for a new round of government interventions. Watch for the equivalent of the Sarbanes-Oxley Act. There'll be much posturing about how the new regulations "will keep this from ever happening again," but that's more nonsense because the root problem is not lack of regulation. It's government social engineering of the housing market, which will be unchanged.
This is the path to stagnation and poverty. As Nobel Laureate F.A. Hayek taught, markets are too complicated for planners to know enough to plan them. The relevant information, scattered unspoken among billions of market participants, is beyond the bureaucrats' reach.
We do need protection from reckless businessmen. But there is only one way to provide that: market discipline. That means: no privileges, and no bailouts.
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Myths, Lies and Downright Stupidity: Get Out the Shovel --- Why Everything You Know Is Wrong
Stossel mines his 20/20 segments for often engaging challenges to conventional wisdom, presenting a series of "myths" and then deploying an investigative journalism shovel to unearth "truth." This results in snappy debunkings of alarmism, witch-hunts, satanic ritual abuse prosecutions and marketing hokum like the irradiated-foods panic, homeopathic medicine and the notion that bottled water beats tap. Stossel's libertarian convictions make him particularly fond of exposes of government waste and regulatory fiascoes. Sales help fund JWR.
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JWR contributor John Stossel is co-anchor of ABC News' "20/20." To comment, please click here.
© 2008, by JFS Productions, Inc.
Distributed by Creators Syndicate, Inc.
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