Wednesday, September 24, 2008

The economic mess

I haven't written much here about the current crisis in the financial industry, except to refer you to my piece in the Register week before last on Fannie and Freddie. But I have been paying more attention than I might have wanted to. I'm working on a piece for this Sunday's Register Commentary that will, I hope, explain how most of the crisis has a made-in-Washington rather than a "made on Wall Street" character -- not the result of a failure of the free market, but of too much government intervention into the free market. Meantime, here's a good piece that appeared on the Mises Institute Website with more specific numbers than I had on Fannie and Freddie. The WSJ editorial page has had some of the best commentary, from a piece by AEI's Peter Wallison, whome I interviewed, to several outlining the problems with make-to-market accounting, mandated by the government. Other good pieces here, here, and here.

Incidentally, as much as I think a $700 billion bailout is an extraordinarily bad idea, I'me afraid that we have the makings of a real crisis. The government is likely to make it worse.

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