The 2008 financial crisis “proved that financial markets are not self-regulating,” says political scientist Francis Fukuyama in a recent interview with the website TheBrowser: “[Peter Wallison] lays it all at the door of Fannie and Freddie and government intervention. It seems to me transparently designed to exonerate free markets…I like free markets…[but] that particular conclusion I just find astonishing.” Fukuyama isn’t alone in depicting Wallison as an uncomprimising ideologue who thinks government deserves all the blame. New York Times columnist Joe Nocera called Wallison’s work “loony” and accused him of helping to concoct “what has since become a Republican meme.” Even pro-free market economist Russ Roberts took Wallison to task for downplaying the role of investment banks in causing the crisis. So who is Peter Wallison? He’s a scholar at The American Enterprise Institute and was a leading member of the 10-person Financial Crisis Inquiry Commission, a government-created body charged with looking into the causes of the 2008 meltdown. After a year of hearings and deliberation, the commission produced its official report which laid most of the blame on deregulation and private sector avarice. Wallison publicly broke with the commission over the report. “Instead of pursuing a thorough study,” says Wallison, “the commission’s majority used its extensive statutory investigative authority to seek only the facts that supported its initial assumptions – that the crisis …

It took 150 years to blow up the banking sector – a brief history of a slow detonation. From Freedomain Radio – www.freedomainradio.com Sources www.bankofengland.co.uk

The financial reform bill currently working its way toward President Barack Obama’s desk for signing is being touted as the biggest overhaul of the banking and investment sectors since the Great Depression. But the new regs won’t be any more effective than the ones they replace in fixing anything or preventing the next major panic for at least three reasons. 1. New Watchdog, Old Tricks They create a new watchdog consumer agency designed to protect consumers from their own supposed stupidity. You’ll now be facing fewer choices when it comes to getting credit cards, loans, and other basic financial transactions. 2. Never Too Big To Fail They replace “Too Big to Fail” with… “Too Big to Fail.” One of the reasons why major financial institutions played Russian Roulette with the economy was because they were betting they would get bailed out. Which is precisely what happened. The new rules codify the idea that the government will make sure certain institutions can never fail. And if you think the big boys won’t game that system, then you don’t understand how well Citigroup, Goldman Sachs, et al have come through the current meltdown. 3. Housing Bubble Trouble The financial crisis was set into motion by government policies that encouraged people to buy homes they couldn’t afford at prices that were unsustainable. Between desperate attempts to keep people in houses and to keep interest rates below an effective rate of zero, the government continues to pour more money down the …

High-quality version: www.youtube.com A free market analysis of how we ended up in the current financial crisis — and a simple sentence to clear it up for everyone else! Freedomain Radio – www.freedomainradio.com