"An Open Letter to My Friends on the Left" by Steven Horwitz


Great piece by Steven Horwitz entitled "An Open Letter to my Friends on the Left".

Its all good, but here are few lines to wet your appetite. Remember this is dated September 28, 2008, basically when the crap hit the fan in the credit markets.

"In the last week or two, I have heard frequently from you that the current financial mess has been caused by the failures of free markets and deregulation. I have heard from you that the lust after profits, any profits, that is central to free markets is at the core of our problems. And I have heard from you that only significant government intervention into financial markets can cure these problems, perhaps once and for all. I ask of you for the next few minutes to, in the words of Oliver Cromwell, consider that you may be mistaken. Consider that both the diagnosis and the cure might be equally mistaken."

"Consider instead the problems of this mess were caused by the very kinds of government regulation that you now propose. Consider instead that effects of the profit motive that you decry depend upon the incentives that institutions, regulations, and policies create, which in this case led profit seekers to do great damage. Consider instead that the regulations that may have been the cause were supported by, as they have often been throughout US history, the very firms being regulated, mostly because they worked to said firms' benefit, even as they screwed the rest of us. Consider all of this as you ask for more of the same in the name of fixing the problem. And finally, consider why you would ever imagine that those with wealth and power wouldn't' rig a new regulatory process in their favor."

"Many of you have rightly criticized the ethanol mandate, which made it profitable for corn growers to switch from growing corn for food to corn for fuel, leading to higher food prices worldwide. What's interesting is that you rightly blamed the policy and did not blame greed adn the profit motive! The current financial mess is precisely analogous."

He then goes on to detail the different policies and regulations that led to the problem.

If you have the time, please read it and if so inclined, send to your lefty friends.


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