ARC: The Unfree Market Has Failed

The Ayn Rand Center for Individual Rights recently released a short statement by Yaron Brook that accurately captures the nature of our financial crisis:

The Unfree Market Has Failed 
September 19, 2008

Washington, D.C.--“Everyone is blaming ‘the free market’ for today’s financial crisis,” observed Yaron Brook, executive director of the Ayn Rand Institute. “But we should be blaming the unfree market. The mortgage and financial markets have been thoroughly controlled by government--and that is why they failed.

“It was the government’s hand in the creation of Fannie Mae and Freddie Mac, the Federal Reserve Board’s inflationary policy of keeping interest rates artificially low, the irrational lending standards forced on lenders by the federal Community Reinvestment Act, and the quasi-official policy of bailing out large financial institutions deemed too big to fail, that contributed to creating a situation in which millions of people were buying homes they could not afford, in which the participants experienced the illusion of prosperity, in which billions upon billions of dollars were going into bad investments.

“We do not need more regulation or economic ‘supervision.’ What we need to do is remove the government’s power to coerce, bribe, reward and bail out irrational decisions. The unfree market has failed. It’s time for a truly free market.”

NOTES

1. "The Unfree Market Has Failed," Yaron Brook, Ayn Rand Center for Individual Rights, 18 Sep 2008.  ("http://www.aynrand.org/site/News2?page=NewsArticle&id=21249")