Amazeroth wrote:Darkylightytwo wrote:you probably did not notice, but the central bank lowering or making the interest rate higher has no impact on the free market for me. Because I am thinking in a very classical mindset. If you are thinking with the neo-liberal mindset, you probably do not believe this, because regulation impede on the free markets, but I don't believe regulations limit the free market.
Having no rules is just stupid, if you do not organise the economy, has a government, then other will organise you, and the america government did not organise anything, he had to be organised.
There is nothing neo-liberal about thinking that the markets don't need rules. Every libertarian agrees (and every neo-liberal, as thin as the dividing line is, too) that there need to be rules. However, all of the rules impact the market, regardless if it's free or not, and the central bank maintaining the interest rate affects the market very much, regardless if it's free or not.
Also, what a "free market" is is not dependent on your mindset - if you're going to make your personal definition of what constitutes a "free market", all you do is make the term more unclear. If we're saying that the market isn't (completely) free when a central bank acts by doing things with the interest rate, because the definition of a free market is a market where the government doesn't intervene by setting economic measures, and you're counter is that you have a different definition, then we're no longer arguing about libertarianism vs. whatever ideology you follow, but only definitions. And that's pointless.
Every libertarian is a neoliberal, as neoliberals believe a market is free when there is a little intervention from the state as possible. But I certainly do not agree with such a definition.
And I'll even add, there is no point into having bad rules or rules that are no enforced.
And yes the definition is important, because you would see intervention of the state does not intervene in economy, while this is not important to me, the free market is more like a place where people can put forward their ideas and their prices in a free and fair competition. So the state could control all enterprises and the market could still free for me as long and what is important is present. this is a big difference in classic liberalism and neoliberalism.
Amazeroth wrote:By the way, you were talking about bank bailed out by government, we had no choice, I agree, we should have nationalise them or anything, but that is too socialist, so instead we gave them money, but we had no choice in that regard, else the crisis would have been prolonged, Beside, the FED is semi-private.
Of course there was a choice. Also, the crisis has been very effectively prolonged by bailing the banks out - after all, the banks don't have to change much in their practices now, since they don't have to be afraid of ever failing.
Letting more bank going bankrupt was not acceptable solution, for even the neoliberal in the Bush government, did you watch the video I show you, I think you should, at least this piece of info does not come from me. a communist.
maybe one or two forced nationalisations would have taken care, you've been a joke, you cost plenty to the public, you were in risky loans, you don't deserve to be in business, the state will run it for you, pretty that would a send a strong message to all banks. if you are serious about your business, you don't deserve it. And no, this does not limit the free market as the consequence for bad actions is the same for any bank that is caught, nationalisation and the bank could still be independant from the state, after all.
Look at the relation between CBC and the canadian government, many government tried to make it a state-tv but CBC always resisted, we don't want political interference in CBC, could be the same,
Amazeroth wrote:An easy way the bubble could have been avoid is to not give loan to people who could not pay, that started here.
True, but two things did see to it that that wasn't a real possibility. For one, banks and rating agencies were pretty shure that the people would be able to pay when the time came (or at least that foreclosing on their houses would settle the debt). That was of course wrong, but at least in general this is the very risk of giving loans in the first place - you never know if you'll get it back.
The second thing was that the government itself encouraged banks to give loans to low-income clients searching for homes. Which is, again, showing that this was not a problem caused by a free market.
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1, this is answered in the video I gave you, they though they could put the house to sell and make up their loan. so they though it was safe, but house market said something else.
2 The government did not force the banks to give such loans. it decided to reward bad decisions, yeah, but that is far from Keynesianism, as giving loans to low-income is not a good decision and I am sure we can all agree to that.