Comments on: Dead economist predicts housing crisis 62 years in advance http://blog.aynrandcenter.org/dead-economist-predicts-housing-crisis-62-years-in-advance/ Fri, 05 Mar 2010 06:08:48 -0800 hourly 1 By: even if you cannot see the cost… « nineowls http://blog.aynrandcenter.org/dead-economist-predicts-housing-crisis-62-years-in-advance/comment-page-1/#comment-544 even if you cannot see the cost… « nineowls Wed, 06 May 2009 00:38:49 +0000 http://blog.aynrandcenter.org/?p=189#comment-544 [...] Dead economist predicts housing crisis 62 years in advance — VOICES for REASON reading an excellent account of the government-created incentives that helped cause the catastrophic housing boom and bust Posted by nineowls Filed in entrepreneur No Comments » [...] [...] Dead economist predicts housing crisis 62 years in advance — VOICES for REASON reading an excellent account of the government-created incentives that helped cause the catastrophic housing boom and bust Posted by nineowls Filed in entrepreneur No Comments » [...]

]]> By: Peter Cini http://blog.aynrandcenter.org/dead-economist-predicts-housing-crisis-62-years-in-advance/comment-page-1/#comment-101 Peter Cini Tue, 24 Feb 2009 02:58:08 +0000 http://blog.aynrandcenter.org/?p=189#comment-101 Dear Mr. Epstein, I am relatively new to Objectivism having picked up Atlas Shrugged in earnest several months ago. While much of her philosophy resonates with me I am still not fully coming to terms with it and will cite one or two examples. Having been through several recessions I am very much aware that any business can fail at any time. I also recognize that businesses don't always act in their own self interest, much in the same way individuals do. Objectivism states that I must practice due diligence on every business I deal with, my bank, my broker, the toy manufacturer, etc. I understand this to a degree however from a rational standpoint investing too much of my time in doing so is counterproductive. Let us say I have $125,000 accumulated in savings and am considering a bank CD as an investment (to be conservative, I am older and may need the money). Right now I can do so without concern as I know it is federally insured. Not being the case I would take my money out of the bank. Why? I could allot several days to analyzing a bank's statement of condition, profit and loss statements, cash flows (assuming I have the expertise) and doing background checks on their officers. Experience, however, has taught me that this is not sufficient; there are many examples of businesses falsifying their records. You will say that I have recourse because they are doing something illegal, but in most cases this is when the money is mostly gone and not recoverable, I will have to settle for pennies on the dollar. Incidentally, there are also plenty of legal ways to take advantage of consumers (just read the 50 page contractual agreements drafted by lawyers that no layman could possibly understand). What does this lead to? An atmosphere of distrust, the shrinking of credit markets and a reluctance to do business outside your immediate circle. Our nation may not have survived the revolutionary war without a central bank and the establishment of credit, was Hamilton so off the mark in that regard? I am also puzzled by the theory that those companies that make good products will invariably be the most successful. I think by good it is meant “what the customer wants” not necessarily what is good quality. A quick peek at the food industry confirms this notion as we are inundated with food of little or no nutritional value and the costs in terms of health care are exorbitant. Not the responsibility of the producers certainly but the point is made. Today I will not purchase foodstuffs from unregulated markets like China (melamime scandal aside) and if our markets are totally unregulated I would be constrained to dealing only with local merchants. As a business must know their customer so should the obverse be true. The kind of honest businessman Rand writes of is one I have rarely encountered and in recognition of this fact I must rationally act in my own self interest by limiting my exposure and predicating all dealings on the basis of mistrust for the sake of being prudent. Will such a society be the most inventive, productive and technologically advanced or will it sacrifice some of these qualities as a requirement to adhere to certain principles? Can a market fettered by distrust function efficiently or is it better to have some limited regulation to grease the wheels? I am not so sure and continue to look for answers; historically I am not aware of any culture that emulated objectivism. I apologize for my unlettered correspondence; my education is rather limited and I am painfully reminded whenever addressing someone with greater intellect. Have to try, though. Best Regards, Peter Cini Dear Mr. Epstein,
I am relatively new to Objectivism having picked up Atlas Shrugged in earnest several months ago. While much of her philosophy resonates with me I am still not fully coming to terms with it and will cite one or two examples.
Having been through several recessions I am very much aware that any business can fail at any time. I also recognize that businesses don’t always act in their own self interest, much in the same way individuals do. Objectivism states that I must practice due diligence on every business I deal with, my bank, my broker, the toy manufacturer, etc. I understand this to a degree however from a rational standpoint investing too much of my time in doing so is counterproductive.
Let us say I have $125,000 accumulated in savings and am considering a bank CD as an investment (to be conservative, I am older and may need the money). Right now I can do so without concern as I know it is federally insured. Not being the case I would take my money out of the bank. Why? I could allot several days to analyzing a bank’s statement of condition, profit and loss statements, cash flows (assuming I have the expertise) and doing background checks on their officers. Experience, however, has taught me that this is not sufficient; there are many examples of businesses falsifying their records. You will say that I have recourse because they are doing something illegal, but in most cases this is when the money is mostly gone and not recoverable, I will have to settle for pennies on the dollar. Incidentally, there are also plenty of legal ways to take advantage of consumers (just read the 50 page contractual agreements drafted by lawyers that no layman could possibly understand).
What does this lead to? An atmosphere of distrust, the shrinking of credit markets and a reluctance to do business outside your immediate circle. Our nation may not have survived the revolutionary war without a central bank and the establishment of credit, was Hamilton so off the mark in that regard?
I am also puzzled by the theory that those companies that make good products will invariably be the most successful. I think by good it is meant “what the customer wants” not necessarily what is good quality. A quick peek at the food industry confirms this notion as we are inundated with food of little or no nutritional value and the costs in terms of health care are exorbitant. Not the responsibility of the producers certainly but the point is made.
Today I will not purchase foodstuffs from unregulated markets like China (melamime scandal aside) and if our markets are totally unregulated I would be constrained to dealing only with local merchants. As a business must know their customer so should the obverse be true. The kind of honest businessman Rand writes of is one I have rarely encountered and in recognition of this fact I must rationally act in my own self interest by limiting my exposure and predicating all dealings on the basis of mistrust for the sake of being prudent.
Will such a society be the most inventive, productive and technologically advanced or will it sacrifice some of these qualities as a requirement to adhere to certain principles? Can a market fettered by distrust function efficiently or is it better to have some limited regulation to grease the wheels? I am not so sure and continue to look for answers; historically I am not aware of any culture that emulated objectivism.
I apologize for my unlettered correspondence; my education is rather limited and I am painfully reminded whenever addressing someone with greater intellect. Have to try, though.
Best Regards,

Peter Cini

]]> By: Atlas shrugs? | Onar Åms Lillablogg http://blog.aynrandcenter.org/dead-economist-predicts-housing-crisis-62-years-in-advance/comment-page-1/#comment-92 Atlas shrugs? | Onar Åms Lillablogg Fri, 20 Feb 2009 11:28:12 +0000 http://blog.aynrandcenter.org/?p=189#comment-92 [...] som mener at dagens kollaps skyldes kapitalismen bør lese Atlas Shrugged og mange andre ekte kapitalister. Les og bli [...] [...] som mener at dagens kollaps skyldes kapitalismen bør lese Atlas Shrugged og mange andre ekte kapitalister. Les og bli [...]

]]> By: JL Wallace http://blog.aynrandcenter.org/dead-economist-predicts-housing-crisis-62-years-in-advance/comment-page-1/#comment-73 JL Wallace Mon, 16 Feb 2009 22:32:24 +0000 http://blog.aynrandcenter.org/?p=189#comment-73 Nice article! The Shadow Banking Elite that manipulate the global economy set-up a vehicle to protect themselves in preparation for the global collapse. It's called the PORTAL Alliance. Exhibit A: Have you ever heard anything about the Nasdaq's "PORTAL Alliance"? This consortium of Rothschild-influenced banks was created in November of 2007, but there has been a complete media blackout regarding any of its activities since it was created. When you look at the list of financial institutions and banks that are "members", everything that has happened in the financial markets since last November (a fascist coup) starts to make one uneasy... From Forbes.com: (1744-1812) Meyer Amschel Rothschild: Meyer Amschel Rothschild helped invent modern banking by introducing concepts such as diversification, rapid communication, confidentiality and high volume. The superlatively discreet foreign-exchange banker diversified from the very beginning, selling antiques and procuring loans. Remarkably, Rothschild was willing to cut into his own profits in order to secure future business. And, earlier than most, he understood that time and information meant money, and he pulled out all the stops to remain in constant contact with associates across Europe. That network came in handy when he helped finance England's war effort during the Napoleonic Wars. Rothschild institutionalized his bank with a far-sighted will that ensured the continuation of his business. Considered a founding father of international finance, his banking empire--thanks to his five sons--had expanded to London, Paris, Vienna and Naples at the time of his death. Corporate Heirs: Merrill Lynch (nyse: MER ), Lehman Bros. (nyse: LEH ), Bear Stearns (nyse: BSC ), Goldman Sachs (nyse: GS )... http://www.forbes.com/business/2005/07/21/rothschild-banking-international-cx_0721bizmanrothschild.html ------- PORTAL Alliance: The founding members of The PORTAL Alliance are: Bank of America, Bear Stearns, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, NASDAQ, UBS and Wachovia Securities. (see: "PORTAL Alliance" - 144a) http://biz.yahoo.com/pz/071112/131151.html http://ir.nasdaq.com/releasedetail.cfm?ReleaseID=275224 http://www.reuters.com/article/companyNewsAndPR/idUSN1245320920071112?sp=true http://www.portalalliancemarket.com/ Nice article! The Shadow Banking Elite that manipulate the global economy set-up a vehicle to protect themselves in preparation for the global collapse. It’s called the PORTAL Alliance. Exhibit A:

Have you ever heard anything about the Nasdaq’s “PORTAL Alliance”? This consortium of Rothschild-influenced banks was created in November of 2007, but there has been a complete media blackout regarding any of its activities since it was created.
When you look at the list of financial institutions and banks that are “members”, everything that has happened in the financial markets since last November (a fascist coup) starts to make one uneasy…

From Forbes.com:

(1744-1812) Meyer Amschel Rothschild:
Meyer Amschel Rothschild helped invent modern banking by introducing concepts such as diversification, rapid communication, confidentiality and high volume. The superlatively discreet foreign-exchange banker diversified from the very beginning, selling antiques and procuring loans. Remarkably, Rothschild was willing to cut into his own profits in order to secure future business.
And, earlier than most, he understood that time and information meant money, and he pulled out all the stops to remain in constant contact with associates across Europe. That network came in handy when he helped finance England’s war effort during the Napoleonic Wars. Rothschild institutionalized his bank with a far-sighted will that ensured the continuation of his business. Considered a founding father of international finance, his banking empire–thanks to his five sons–had expanded to London, Paris, Vienna and Naples at the time of his death.

Corporate Heirs:
Merrill Lynch (nyse: MER ), Lehman Bros. (nyse: LEH ), Bear Stearns (nyse: BSC ), Goldman Sachs (nyse: GS )…

http://www.forbes.com/business/2005/07/21/rothschild-banking-international-cx_0721bizmanrothschild.html

——-

PORTAL Alliance:
The founding members of The PORTAL Alliance are: Bank of America, Bear Stearns, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, NASDAQ, UBS and Wachovia Securities.

(see: “PORTAL Alliance” – 144a)

http://biz.yahoo.com/pz/071112/131151.html

http://ir.nasdaq.com/releasedetail.cfm?ReleaseID=275224

http://www.reuters.com/article/companyNewsAndPR/idUSN1245320920071112?sp=true

http://www.portalalliancemarket.com/

]]> By: John Dawson http://blog.aynrandcenter.org/dead-economist-predicts-housing-crisis-62-years-in-advance/comment-page-1/#comment-72 John Dawson Sun, 15 Feb 2009 07:52:15 +0000 http://blog.aynrandcenter.org/?p=189#comment-72 GOOD POST. DO YOU KNOW WHERE I CAN FIND A RELIABLE ANALYSIS OF THE FREDDIE AND FANNIE CATASTROPHE? GOOD POST. DO YOU KNOW WHERE I CAN FIND A RELIABLE ANALYSIS OF THE FREDDIE AND FANNIE CATASTROPHE?

]]> By: Craig Fetty http://blog.aynrandcenter.org/dead-economist-predicts-housing-crisis-62-years-in-advance/comment-page-1/#comment-61 Craig Fetty Fri, 13 Feb 2009 03:52:35 +0000 http://blog.aynrandcenter.org/?p=189#comment-61 Thanks for your comments. I'm delighted this blog has been created so we can jump on and review various commentaries at our leisure. This is a very frustrating time. If only those in positions of power could think as clearly and rationally as the individuals you have mentioned. I fear our government is only building on the mistakes of the past and postponing and amplifying a 'day of reckoning' for our nation and economy. We may all be speaking Chinese someday. I often have flashes of Atlas Shrugged and feel like I am living in the novel. Thanks again. Thanks for your comments. I’m delighted this blog has been created so we can jump on and review various commentaries at our leisure. This is a very frustrating time. If only those in positions of power could think as clearly and rationally as the individuals you have mentioned. I fear our government is only building on the mistakes of the past and postponing and amplifying a ‘day of reckoning’ for our nation and economy. We may all be speaking Chinese someday. I often have flashes of Atlas Shrugged and feel like I am living in the novel. Thanks again.

]]> By: links for 2009-02-12 | Yostivanich.com http://blog.aynrandcenter.org/dead-economist-predicts-housing-crisis-62-years-in-advance/comment-page-1/#comment-58 links for 2009-02-12 | Yostivanich.com Thu, 12 Feb 2009 20:53:37 +0000 http://blog.aynrandcenter.org/?p=189#comment-58 [...] Dead economist predicts housing crisis 62 years in advance — VOICES for REASON "Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise." Duh, that's why those sort of loans are stupid, they should have been created in the first place. The percentage of people owning homes barely increased. (tags: business libertarian economics economy mortgage government usa politics loan) [...] [...] Dead economist predicts housing crisis 62 years in advance — VOICES for REASON "Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise." Duh, that's why those sort of loans are stupid, they should have been created in the first place. The percentage of people owning homes barely increased. (tags: business libertarian economics economy mortgage government usa politics loan) [...]

]]> By: What caused the housing crisis? « Clarity http://blog.aynrandcenter.org/dead-economist-predicts-housing-crisis-62-years-in-advance/comment-page-1/#comment-51 What caused the housing crisis? « Clarity Thu, 12 Feb 2009 14:01:13 +0000 http://blog.aynrandcenter.org/?p=189#comment-51 [...] looks like Alex Epstein beat me to the punch…guess I should have published my draft sooner  [...] [...] looks like Alex Epstein beat me to the punch…guess I should have published my draft sooner  [...]

]]> By: Henry Hazlitt Predicted Housing Crisis in 1946 | 1800blogger http://blog.aynrandcenter.org/dead-economist-predicts-housing-crisis-62-years-in-advance/comment-page-1/#comment-48 Henry Hazlitt Predicted Housing Crisis in 1946 | 1800blogger Thu, 12 Feb 2009 01:51:58 +0000 http://blog.aynrandcenter.org/?p=189#comment-48 [...] Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to “buy” houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in they long run they do not increase overall national production but encourage malinvestment. ~From Chapter VI “Credit Diverts Production” in Henry Hazlitt’s “Economics in One Lesson,” first published in 1946 HT: Ayn Rand Center for Individual Rights [...] [...] Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to “buy” houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in they long run they do not increase overall national production but encourage malinvestment. ~From Chapter VI “Credit Diverts Production” in Henry Hazlitt’s “Economics in One Lesson,” first published in 1946 HT: Ayn Rand Center for Individual Rights [...]

]]> By: Carl Svanberg http://blog.aynrandcenter.org/dead-economist-predicts-housing-crisis-62-years-in-advance/comment-page-1/#comment-44 Carl Svanberg Wed, 11 Feb 2009 20:09:15 +0000 http://blog.aynrandcenter.org/?p=189#comment-44 It's funny. I noted the very same passage just a couple of months ago on my blog. :-) http://svanberg.wordpress.com/2008/12/22/skaffa-er-ett-liv/ It’s funny. I noted the very same passage just a couple of months ago on my blog. :-)

http://svanberg.wordpress.com/2008/12/22/skaffa-er-ett-liv/

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