02/05/09 - Cafehayek.com by Russell Roberts
If we had an "unregulated free market":
- The banks that made stupid investment decisions would have gone bankrupt and be under new management.
- The investment rating agencies that rated subprime loans as "AAA" would be disgraced, bankrupt and out of business -- no one on earth would deal with them any longer
- No one could force bankers to make risky loans, as is currently done by the Community Reinvestment Act, lawsuits from ACORN, and the Justice Department.
- No central bank would be in charge of the entire money supply.
- - to make credit available at too-low interest rates.
- - to create a permanent inflation that made housing jump in "value".
- - to encourage risk by being a lender of last resort.
- - to condone and support an over-leveraged banking system, where reserves are only 4% of loans outstanding, inviting constant instability.
- No Fannie Mae, Freddie Mac, or FHA could direct trillions of dollars into unaffordable housing construction.
- The government could not borrow $1 trillion for handouts to political interest groups.
- The few elements of remaining capitalism would not struggle under thousands of pages of rules and regulations, and dozens of government agencies.
- The little guy would not have to contribute his funds to a government that saves the incompetent and the dishonest from the consequences of their own actions.