Thomas Sowell is a very bright man with uncommon common sense. A guest on my show only once (he is very tough to nail down), a free market thinker he does a great job of tracing the root cause of the current financial crisis, an even if you are one to believe that “greedy bankers” caused the collapse by eagerly plunging into the sub-prime market, you need to know who encouraged the “greed” and enabled these bankers and mortgage brokers to make loans that in years past would never have been considered. As usual Thomas Sowell touches on the very erosion of America’s soul: a willingness to compromise values and principals in the name of the “greater society”. The results as you will read, were disastrous.
What was lacking in the housing market, they say, was government regulation of the market’s “greed.” That makes great moral melodrama, but it turns the facts upside down.
It was precisely government intervention which turned a thriving industry into a basket case.
An economist specializing in financial markets gave a glimpse of the history of housing markets when he said: “Lending money to American homebuyers had been one of the least risky and most profitable businesses a bank could engage in for nearly a century.” That was what the market was like before the government intervened. Like many government interventions, it began small and later grew.
Take the time to read the entire article. It is short. It is the truth and is an example where the best intentions of governments can go so awry.
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His books, all readable economics texts, should be required reading for both academia and all elected members of our government.
That way, our “representatives” will have no excuse for their ignorance, and the public will know when the wool is being pulled over their eyes. The media would have nothing to do…..