Alex Epstein on the roots of the financial crisis:


Too Big To Bail (March 18, 2008)
We need to phase out “too big to fail” and replace it with a free market in banking, which would reward sound long-term lending and borrowing practices and punish irresponsible ones. Otherwise, the next financial market fiasco is just a matter of time. Any doctrine that encourages overly-risky investing, and punishes sound risk-taking is unfair and destructive. We need to phase out “too big to fail” and replace it with a free market in banking, which would reward sound long-term lending and borrowing practices and punish irresponsible ones. Otherwise, the next financial market fiasco is just a matter of time.

Subprime Meltdown and Project Lifeline: Collaboration or Intimidation? (March 9, 2008)
What today’s market desperately needs is for lenders and borrowers to bear the full consequences of their own bad decisions, and for the government to stop manipulating the market, violating property rights, and inviting future disasters.

Take Responsibility for Your Decisions: An Open Letter to Borrowers and Lenders (June 5, 2008)
Throughout the housing crisis, we have heard demands from spokesmen for desperate homeowners, banks, and investors for every variety of government bailout. But there is one group from whom the nation has not heard: the millions of Americans who, like me, had nothing to do with the crisis, who entered into mortgage contracts they could meet or who refused to buy at exorbitant prices, but who will be forced to pay the bills for these bailouts. If we had a spokesman, this is what I wish he would say.
 
The Injustice of “Doing Something” about Subprime (November 7, 2007)
As we witness large numbers of defaults on subprime loans–loans extended to those with no credit or bad credit–many are calling for the government to do something to stop the suffering. At the same time, many recognize that a bailout of struggling homeowners would be wrong. Thus, we see a growing list of proposed solutions that purport to save the day without a bailout: “borrower assistance” programs to refinance defaulting mortgages, crackdowns on “predatory lending” practices, or laws restricting mortgages the government deems too risky. In fact, regardless of how these proposals are described, all embody the essence of a bailout: they absolve individuals of responsibility for their bad decisions–and force those who did nothing wrong to pay the price.
 

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