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Corrupted Capitalism and the Housing Crisis
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2014 Apr 18, 1:56am 24,924 views 94 comments
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smaulgld
2014 Apr 20, 10:56pm
A company can only seek profit lawfully
Implicit in the lawful market is the government. Businesses cheat. Those who vilify the government as the sole criticism of "markets" are biased liars. You don't get to blame government for BOTH capitalism's desire to cheat the consumer for profit (this is intrinsic to humans and their business entities) and the fact that when the cheating succeeds it is because of government inefficiency or corruption.
Inherent in human nature is fraud for some. Institutions enable it on a larger level. Capitalists do not have an initial desire to cheat customers for profit any more than your neighbors have an initial desire to rob your home. Some may but for most businesses and people their primary aim is not to commit crimes.
Similarly most politicians don't run for office to get kickbacks and bribes.
Yet these things happen. Madison wrote if men were angels, no government would be necessary. I take the view that large business and large government are inherently more corruptible than smaller ones. If big government enables big corporations, I think a smaller government would be less able to facilitate unlawful, unethical and un earned profits that big companies make.
Both big business and government are to blame. More essential goods and services, however, come from businesses than government so I favor curbing government more than business.
Reduce the government size, and let big companies try to cheat customers and competitors will drive them from the market.
Here is an example of how a big government regulatory agency with a massive budget is ineffective in regulating the big banks
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http://www.acton.org/pub/commentary/2012/02/15/corrupted-capitalism-housing-crisis
As Robert Bridges wrote in the Wall Street Journal last year, “we have put excessive emphasis on owner-occupied housing for social objectives, mistakenly relied on homebuilding for economic stimulus, and fostered misconceptions about homeownership and financial independence. We’ve diverted capital from more productive investments and misallocated scarce public resources.†This misallocation laid the foundations for the housing crisis.
#housing