Unfree Market Failed, Brook Notes

Yaron Brook has pointed out that the recent economic troubles have been caused by misguided government intervention, not by the progressively smaller element of freedom left in the market:

Everyone is blaming “the free market” for today’s financial crisis… But we should be blaming the unfree market. The mortgage and financial markets have been thoroughly controlled by government–and that is why they failed.

It was the government’s hand in the creation of Fannie Mae and Freddie Mac, the Federal Reserve Board’s inflationary policy of keeping interest rates artificially low, the irrational lending standards forced on lenders by the federal Community Reinvestment Act, and the quasi-official policy of bailing out large financial institutions deemed too big to fail, that contributed to creating a situation in which millions of people were buying homes they could not afford, in which the participants experienced the illusion of prosperity, in which billions upon billions of dollars were going into bad investments.

We do not need more regulation or economic “supervision.” What we need to do is remove the government’s power to coerce, bribe, reward and bail out irrational decisions. The unfree market has failed. It’s time for a truly free market.

Brook works for the Ayn Rand Institute. Today’s world, with its massive national takeovers of large segments of the market, return to mysticism, publication of popular nonsensical books, etc., is starting to feel altogether too much like the declining world of Rand’s Atlas Shrugged.