61 Economists Sign Letter Against Federal Intervention

Discussion in 'Wall St. News' started by THE-BEAKER, Dec 7, 2007.

  1. the day the free markets died.

    what a sham.

    paulson should be ashamed of himself.

    free markets mean just that.

    he made all his money from it.

    what with northern rock and now this weeks debacle the central banks and treasury officials might as well have converted to communism.

    An Open Letter to the United States Congress:
    We, the undersigned economists, write to strongly advise against excessive new
    regulations or federal interventions as a response to current trends in the housing market. Market
    corrections have already begun, with financial institutions writing down bad debts and adopting
    new lending standards to avoid future foreclosures. Legislation to create new underwriting
    standards will reduce competition and restrict consumer access to credit. Additionally, efforts to
    bail out or shore up lending institutions create a moral hazard that would slow the adjustments
    required in the marketplace.
    Government solutions, as opposed to the current market correction, would create changes
    whose effects will linger long into the future. Legislative proposals have included expanding the
    role of government sponsored enterprises, mandating new underwriting standards, allowing
    bankruptcy courts to rewrite the terms and conditions of mortgage contracts, and expanding
    liability to those who securitize loans. These proposals would fundamentally alter the workings
    of the mortgage market, leaving consumers with fewer choices when seeking to buy a home and
    potentially increasing taxpayer exposure for bad loans.
    It is important to realize that the market for subprime mortgages has provided consumers
    with greater access to credit and new opportunities for home ownership. Current laws provide
    the necessary authority to address abuses that have occurred and, in light of recent market
    activity, lenders have already responded with tighter standards to avoid potential foreclosures. In
    fact, more than 80 percent of all sub-prime mortgages continue to be paid on time.
    Opposing excessive new regulations is important as the subprime mortgage market
    adjusts to existing market conditions. Access to such mortgages has provided more benefits than
    harm to consumers, and through market discipline, lending institutions are taking the necessary
    steps to address the problems that have emerged. Forcing taxpayers to bear the costs of this
    adjustment is unwarranted and reduces the incentives for financial institutions to correct past
    behavior. Additionally, new regulations or underwriting standards will restrict consumer access
    credit and hinder the market’s correction.
    Michael Alexeev, Indiana University
    Charles W. Baird, California State University – East
    L. Dwayne Barney, Boise State University
    John J. Bethune, Barton College
    Don Bellante, University of South Florida
    Samuel Bostaph, University of Dallas
    Bruce Caldwell, University of North Carolina -
    Noel D. Campbell, University of Central Arkansas
    Bryan Caplan, George Mason University
    John Conant, Indiana State University
    Eleanor D. Craig, Delaware University
    Richard Ebeling, Foundation for Economic Education
    James R. Edwards, Montana State University –
    Frank Egan, Trinity College
    Frank Falero, California State University
    Price Fishback, University of Arizona
    Arthur A. Fleisher, III, Metropolitan State
    College of Denver
    Fred Foldvary, Santa Clara University
    B. Delworth Gardner, Brigham Young University
    James F. Gatti, University of Vermont
    David E. R. Gay, University of Arkansas
    Erik Gartzke, University of California - San Diego
    Adam Gifford, Jr., California State University
    Micha Gisser, Rio Grande Foundation
    Charles J. Goetz, University of Virginia School of Law
    Peter Gordon, University of Southern California
    Gerald Gunderson, Trinity College - Hartford
    Frank Hefner, College of Charleston
    Robert Heidt, Indiana University School of Law –
    David R. Henderson, Hoover Institution
    William D. Hermann, Golden Gate University
    Melvin J. Hinich, University of Texas – Austin
    Mark Hirschey, University of Kansas
    Steve Horwitz, St. Lawrence University
    James L. Huffman, Lewis & Clark Law School
    Thomas R. Ireland, University of Missouri – St. Louis
    Michael C. Jensen, Harvard Business School
    David L. Kaserman, Auburn University
    George G. Kaufman, Loyola University Chicago
    David N. Laband, Auburn University
    Deepak Lal, University of California - Los Angeles
    Philip LeBel, Montclair State University
    Dwight R. Lee, University of Georgia - Athens
    Bill Marcum, Wake Forest University
    Barry J. Seldon, University of Texas at Dallas
    Stephen Shmanske, California State University – East
    William F. Shughart, II, University of Mississippi
    David E. Spencer, Brigham Young University
    Courtenay C. Stone, Ball State University
    Richard J. Sweeney, Georgetown University
    Thomas C. Taylor, Wake Forest University
    Clifford F. Thies, Shenandoah University
    Edward Tower, Duke University
    Leo Troy, Rutgers University – Newark
    T. Norman Van Cott, Ball State University
    Robert Whaples, Wake Forest University
    Gary Wolfram, Hillsdale College
    DeVon L.Yoho, Ball State University
    Stephen T. Ziliak, Roosevelt University
    Affiliations for identification purposes only.

  2. 61 economists agree on something. We are screwed.
  3. It'll be a long time before the TREND of more government intervention reverses. In the meantime, trade with the trend, and bet on the PPT to try everything possible.:cool:
  4. We, the shortsellers, feel the intervention and subsequent hubris it has encouraged, is not good for our short YM positions, and feel it in the best interest of the US government, to let all homeowners suffer and die (so we can buy a new porsche)

  5. exactly my thoughts too
  6. Intervention and bailouts will NEVER end until the US Gummint and financial system implodes.

    Unfortunately, we Americans don't have enough political courage nor sophistication to THROW THESE BUMS OUT.
  7. University professors are all Communists.
  8. And now he has to find a way to keep his wealth/power. Typical move resembling the axiom: capitalism for the poor--socialism for the rich.
  9. Good lord these guys are against continued Government intervention, and for a free market solution. How is that being a Communist ? I had one of these guys in College, he is as free market as it gets.
  10. What the fuck are you talking about?

    It's more than that. That has got to be one of the stupidest fucking posts I've seen today.
    #10     Dec 7, 2007