Posts Tagged: free markets

Snip: Our “proposal for tougher financial regulation…sounds interesting and is very much worth reading.” But he does quibble with our “overtoughly tough” words for Frank and Dodd.
Check it out here.

Nobody gets Fannie and Freddie better than Peter Wallison. Here Peter explains why the twins should be privatized but won’t be: having their own mortgage bank is just too much fun for Congressmen
Everybody wants to talk about the Fed raising the discount rate.  Bank profits may go down fractionally, otherwise, snore, snore. Point 75 like [...]

If supporters of free markets are to grapple effectively with the fallout of the late crisis, they need to start by getting one thing clear in their heads: Modern banks, especially the big banks, are not free market institutions. They are agencies of the government.

Creating and maintaining the value of the currency is a core function of government, laid out right in the Constitution (c.f. “and regulate the Value thereof”). In a modern, credit based financial system the mechanism through which dollars are created and their value regulated is the banking system.