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Libertarians and ‘libertarians’ on the Fannie/Freddie mess

The Libertarian Party issued a press release today entitled “Let Them Fail!” in regards to the Fannie Mae/Freddie Mac government-sponsored enterprise meltdown.

“Let them fail, and let them learn from their mistakes on their own dime,” says Libertarian Party spokesperson Andrew Davis, referring to the mortgage institutions Freddie Mac and Fannie Mae, who the Bush administration has said it plans to rescue from financial collapse. “Bailing out these two institutions will only delay the inevitable outcome of any financial firm insulated from the market by government backing. The long run damage of continuing a policy of bailouts far exceeds any short term woes in letting the market consume failing institutions.”

Cato scholars — alleged libertarians themselves — have a different take on the matter. Thomas Firey, Cato’s editor of Regulation magazine, says Fannie is a “much needed lubricant to the mortgage market.”

Somebody’s getting screwed.

Meanwhile, Cato Senior Fellow and former Fed banker Gerry O’Driscoll also endorses a bailout of the GSEs.

Jim Rogers — who when asked what two things he would do as Fed chairman said he would “abolish the Fed and resign” — offers his take below.

Editor’s Note: I wrote an article on the Fed’s “massive redistribution of wealth” via Fannie/Freddie for Last Free Voice.

5 Comments

  1. Arthur Torrey Arthur Torrey July 15, 2008

    Of course, as Napster points out, Barr thinks we should be doing something to bail them out, though he isn’t real clear on what…

    Aside from showing he’s a big gov’t supporting, non-libertarian fraud, (which we already knew….) Isn’t it nice when the Party leadership and it’s candidate can’t get on the same page…

    ART

  2. G.E. G.E. Post author | July 15, 2008

    I didn’t invent it.

    But when their scholars advocate things such as this, I don’t know how you can really disagree.

  3. MattSwartz MattSwartz July 15, 2008

    Cato is a much-needed lubricant for our command economy.

  4. G.E. G.E. Post author | July 15, 2008

    Very good release by the LP.

    The Stato Institute is a disgrace.

Comments are closed.