Cato: Blame the Fed

Ivon Denosovich · May 5, 2008

Here, former VP and economic adviser at Federal Reserve Bank at Dallas, Gerald P. O'Driscoll Jr., notes:

As the great Austrian economist Ludwig von Mises argued almost 100 years ago, central planning inevitably fails because there are no market prices to allocate resources. Market prices can only be the outcome of actual market transactions among buyers and sellers. Planners used mathematical formulas to value resources, especially capital. Now Wall Street wizards have imported Soviet thinking to allocate financial capital. Is it any wonder that it failed?
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And critiques the "compassion loans" of Fannie Mae and Freddie Mac:

[P]eople who have no equity in their homes cannot meaningfully be said to be owners. When times turn tough, they will walk away. They were effectively renters, not homeowners.
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Cato: Blame the Fed

Ivon Denosovich New Member