The Free Market is a Natural and Wise Regulator

In his latest column Ron Paul points out that the free market is a natural and wise regulator which works best if it is left alone. Things start going downhill as soon as interventionist governments try to manage the economy, and then blame the free market for the results of their own reckless and convoluted policies.

The Free Market as Regulator

by Ron Paul

Since the bailouts last fall, lawmakers have been behaving as quasi-owners of the bailed-out banks and businesses, leading to calls for increased regulation of executive compensation and other wasteful expenditures. We have heard much about bonuses and executive pay packages that sound more like lottery winnings than an honest salary.

Many lawmakers voted in favor of these unconstitutional bailouts, believing that these corporations were too big to fail, and allowing them to go under would precipitate widespread economic disaster. This second wave of citizen outrage at the bailouts has left these lawmakers with a bit of egg on their face, and once again, they feel the need to “do something” to “fix” it. Shouldn’t there be a regulatory structure in place governing executive compensation? Politically, it seems quite feasible. People are outraged that the system has once again gutted the many to make a few at the top fantastically wealthy. But they are incorrectly demonizing the free market.

What we need to realize is that there WAS a regulatory structure in place that was attempting to stop bad management, including overpaying executives. That regulatory structure is the free market, and when poor management brought these companies to the point of bankruptcy, Congress circumvented the wisdom of the free market, and inserted its own judgment at our expense. And now because of that intervention, we will burdened with massive new regulations. We can be certain this effort will fail.

The free market is a naturally occurring phenomenon that can’t be eliminated by governments, not even totalitarian ones like the former Soviet Union. It can be regulated, over-taxed and manipulated until it is driven underground. Lately it has been wrongly accused of doing so many things it just doesn’t do, that are really the fault of crony corporatism and convoluted government policies that brought on the crisis. Too many people equate the free market with big business doing whatever it wants, but that is not the free market. Unconstitutional taxpayer funded bailouts are what allow giant corporations to run roughshod over the economy. The free market is what puts them out of business when they misbehave.

The free market is you and your neighbors working hard to produce what you produce, and exchanging goods and services voluntarily, in mutually agreeable arrangements. The free market is about respecting property rights and contracts. It is not about building up oligarchs and monopolies and confiscatory tax theft – these are creatures of government.

We must watch out when government comes up with interventionist solutions to interventionist problems. The root of our problems lie in interventionism. Trusting the free market is the solution.


  • Dfens

    A man who organized a support group for parents of children sickened in one of China’s worst food safety scandals pleaded not guilty Tuesday to charges of inciting social disorder, his lawyer said.

    Zhao Lianhai was behind a push for greater accountability and compensation for the victims and their families of the 2008 scandal that shocked China. More than 300,000 children were sickened by milk powder tainted by an industrial chemical, including Zhao’s son, who is now 5 years old. At least six children died. – AP/Google

    This is the America Ron Paul wants for you.

    [L]et us set a good example here, and show the world an honest example of true free trade. And let us stop hurting American workers with mountains of red tape in the name of safety. Safety standards should be set privately, by the industry and by the insurance companies who have the correct motivating factors to do so. – Texas Straight Talk

    • longshotlouie

      Thx for the two interesting paragraphs. Now your mission is to make some connection between the two so that we know what the hell you are talking about.

  • Jesus hung out with the sinners, but he didn’t commit sin.

    One of the things he opposed, much, was the hypocrites.

    “You strain at a gnat but swallow a camel”

    Matthew 23:24 Strain at a gnat, and swallow a camel. A forcible image of those who are very conscientious over small, and careless of great, matters.

    • Fred the Protectionist

      I’ve seen Commies, Greens, Fascists, Republicans, Libertarians, and Anarchists quote from the bible. Where are you going with this? Question mark question mark? You could go anywhere.

      • longshotlouie




  • Nate Y

    I’m godless and woudln’t mind hanging out with any of you. Oh well.

  • christine

    I wish this was now! That the transformation had already taken place. I’ve only started reading the first page, but it sounds so good to me.

    • VR

      Be careful hanging out with the godless.

      • Amen to that VR!

        There are alot of false prophets out their promoting similar things. I would refer to what Jesus warned about these end time zealots.

        • christine

          I think we are on the brink of a huge transformation, from this system of things that is not working {to take care of each other and the earth according to priciples and standards set in scripture) to another “system” that will allow us to express the fruits of the spirit more fully.

          First the cleansing, then the healing.

          • Fred the Protectionist

            I think some people have had waaaay too much estrogen tonight. *makes drinking motion*.

          • longshotlouie

            Maybe you should slow down on that stuff, Fled.

      • christine

        Have you personally looked at their solutions and explanations? A world without politics (that obviously does nothing FOR us), a world without money so it erases lack and poverty, scarcity, where people work togehter from their heart instead of greed. I don’t know what part of that the bible would not be in agreement with.

        • VR

          Yes, I have. My guess would be that you are not actually that familiar with the Bible. I don’t say this as an affront, but simply to point out that the Bible warns against the love of money, not money itself.

          Though you may find some truths in the Z-movement, these truths are used to lead you away from one great truth.

          Notice my original reply did not bash you or the godless.
          I just pointed out that you should be careful of belief in the whole because of some pretty parts.

          And to Nate Y: you live in an almost free society which gives you the right to be godless. You will not find me disrespecting you for that, but you will also not find me shying away from my own belief. My friends and family range from anti-theist to Biblical scholar, and noone has had a problem at holiday dinners. The Christians pray and the rest meditate in their own way. Everyone is on their path to truth.

          Each may believe that the other is wrong, but we don’t knock each other in the head over any other disagreements. Why should this be any different. I guess I’m trying to say that I am more than proud to stand next to you in this battle for our freedoms after reading many of your posts.

          For the believers and non-believers that do not want to strike each other down, I submit this recorded debate between Dr. Atkins and Dr. Craig:

          Peace and Love

          • longshotlouie

            Speaking of debates, this should be a good one:

          • Nate Y

            Thank you and I return the sentiment.

            As you already know, the Bible calls for honest weights and measures with regard to money. Makes sense doesn’t it?

          • christine

            VR, way more years invested in studying the scriptures than I care to say, on a conscientious spiritual journey for years and years and years. Also an advanced meditator, learned Reiki, how to heal with my hands. Our spiritual journeys are individual and our own for sure.

            Jesus had a tough time with the moneychangers too. Overturned their tables. That’s what a lot of us would like to do, but our method might look a little different.

          • christine

            One more thing about money. It is limiting when we really could be more, do more, if we did it and gave freely.

            The current financial system is not working for the most of us and it has never made sense to me how the wealthy spend their money…war, manipulation, to control…while others are starving (intentionally arranged so they would), barely making ends meet. How determined the salaries of the various categories of jobs? Are not all talents necessary to make the ship sail? I’m for making class distictions a thing of the past. The lack that some have affects us all. To date, we have not been able to solve this problem under the current system of things.

            If money were not a part of the equation, then we could each do according to our heart, without the manipulation and limitation of financial restrictions.

          • Christine

            Many Christian churches, perhaps all, do not teach the truth. They are divisive, one denomination thinks they are better than another, more right, others wrong, not unlike various faiths. They teach a version of what they think is the truth. That’s why there are so many denominations under the heading of “Christian”, all breakaways from one another when someone differed in their beliefs. I’ve ventured through a great lot of them in years past and came to some conclusions. Many churches are fear-based. Seems to come through loud and clear with the majority of them, if not all, because those who preach don’t understand what the truth really is. They pass along many misunderstandings of what Jesus taught and how he taught. One Book, many interpretations = confusion, which has been exploited in many ways. Rather, the truth is clear, does not confuse, clears up confusion.

            Say what you will, but this system is not working for the most of humanity if you take a serious look around. Many crimes against humanity are performed every day.

            What kind of government or system allows people to die, go hungry, lose their home, jobs, healthcare, nutritious food, clean water, all because they don’t have enough of those little sheets of green paper. You don’t realize how much this fake system controls your mind and how you think until you take a step back and look at planet earth as a visitor would. Full of crazy crazy people doing senseless acts just for the beliefs that have all been invented and made up from NOTHING.

            I think we can do better than this.

    • christine

      Zeitgeist is not God-less. God is Love. God = Love. They are not “religious” which is very different from being godless. There are a gazillion religions (even within Christianity), all divisions of right/wrong, but there is only One God. Love is. I prefer to stay away from concepts that divide and cause wars, death, destruction, is controlling, and move closer to what unites, is peaceful and in harmony with who we really are.

      • VR

        An emotion is not a god any more than an inanimate object is a god.

        • Christine

          I’m not talking about the emotion of love. That is something else entirely than what I speak of. God is love. scripture. Love is the purest form of energy…that is God. We all come from God. God is everywhere present, in everyone and in all things… because it is energy. There is no place that God is not. Things of the spiritual nature are difficult to explain. High spiritual knowledge is an experience, not an explanation that others would understand. That’s why Jesus used parables, to help others try to understand a level of his high level of wisdom and knowledge.

  • Van Jones

    JERUSALEM – President Obama’s environmental adviser, Van Jones, was the main speaker at an anti-war rally that urged “resistance” against the U.S. government, WND has learned.

    The rally was sponsored by an organization associated with the Revolutionary Communist Party, which calls for the overthrow of the U.S. government and its replacement with a communist dictatorship.

    WND previously reported Jones, special adviser for green jobs, enterprise and innovation to the White House Council on Environmental Quality, is an admitted black nationalist and radical communist.

    In 2002, Jones was a keynote speaker at a rally at People’s Park in Berkeley, Calif., to mark the national launch of Not In Our Name, a Maoist, terrorist-supporting, anti-war group founded by Revolutionary Communist Party member C. Clark Kissinger. People’s Park was created during the radical political activism of the late 1960s.

    Jones spoke alongside Jeff Paterson, the first active-duty soldier to refuse orders to be part of the U.S. attack force during the Persian Gulf War.

  • Dolores Y

    Mark Lloyd is the new FCC Chief Diversity Officer in the Obama administration. His picture here is from a post at which states he is a staff member of the Leadership Conference on Civil Rights and the Leadership Conference on Civil Rights Education Fund. This was dated July 29, 2009. Their Executive Committee includes leaders of AARP, Asian American Justice Center, ACLU, AFL/CIO, and SEIU to name a few. So, a civil rights activist he is.

    You may want to pay serious attention to what he does going forward to see, if or how, his actions could affect free speech in America. For example, he is one of a number of people who co-authored a report in 2007 titled, “The Structural Imbalance of Political Talk Radio,” which seeks to change the structure of the media which said; “The “repeal” of the Fairness Doctrine in 1987 gave station owners and hosts free reign to fill their programming with ideologically conservative content. It calls for 8 FCC offices to exercise control content! No mention was made about the many national news channels and print media that are left-leaning which probably balances out most disparity in talk radio. In a follow-up article, Lloyd wrote the report did not call for a return to the Fairness Doctrine but wants more local ownership. He also said; “We trace the rise and influence of Rush and other conservative radio hosts to relaxed ownership rules and other pro-big business regulation that destroyed localism…” Do you see what he will be trying to do?

    In a speech before the lefist National Conference for Media Reform last year he praised Rowanda and Venezula for their ability to make social change through state run media (see below for video). Talk about disturbing.

    Is Lloyd in a position of power to make sweeping leftist changes to the FCC?

    Update 8/27/09:

    Inspired by Saul Alinsky, FCC ‘Diversity’ Chief Calls for ‘Confrontational Movement’ to Give Public Broadcasting Dominant Role in Communications dated 8/26/09 by CNSNEWS:

    “…Mark Lloyd, chief diversity officer of the Federal Communications Commission (FCC), called for a “confrontational movement” to combat what he claimed was control of the media by international corporations and to re-establish the regulatory power of government through robust public broadcasting and a more powerful FCC. Lloyd expressed his regulatory call to arms in his 2006 book, “Prologue to a Farce: Communications and Democracy in America” (University of Illinois Press)….In the book, Lloyd also said that public broadcasting should be funded through new license fees charged to the nation’s private radio and television broadcasters, and that new regulatory fees should be used to fund eight new regional FCC offices. These offices would be responsible for monitoring political advertising and commentary, children’s educational programs, number of commercials, and content ratings of the programs…Frequently referencing one of his heroes, left-wing activist Saul Alinsky, Lloyd claims in his book that the history of American communications policy has been one of continued corporate control of every form of communication from the telegraph to the Internet…Government, Lloyd said in his book, is the “only” institution that can manage the communications of the public, arguing that Washington must “ensure” that everyone has an equal ability to communicate…”

  • Dolores Y

    Mark Lloyd, newly appointed Chief Diversity Officer of the Federal Communications Commission

    “In Venezuela, with Chavez, you really had an incredible revolution — democratic revolution — to begin to put in place things that were going to have impact on the people of Venezuela. The property owners and the folks who were then controlling the media in Venezuela rebelled — worked, frankly, with folks here in the US government — worked to oust him. He came back and had another revolution, and Chavez then started to take the media very seriously in his country.”

    Fairness Doctrine Raises Its Ugly Head Under New FCC “Diversity Czar”
    posted at 8:47 am on August 14, 2009 by Rovin
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    What’s a poor liberal progressive to do when the radio airwaves are dominated by conservative talk and they can’t seem to “get a word in”? Why not diversify it? After Dan Rather got hammered recently for suggesting the news media needs a public handout, now on the horizon is an FCC Diversity Czar calling for private broadcasting companies to fund public broadcasting companies their total operating cost. Matt Cover at CNSNEWS.COM files this report:

    ( – Mark Lloyd, newly appointed Chief Diversity Officer of the Federal Communications Commission, has called for making private broadcasting companies pay licensing fees equal to their total operating costs to allow public broadcasting outlets to spend the same on their operations as the private companies do. LINK

    Lloyd not only wants the money to come from private companies, he is planning on regulating the content:

    “Local public broadcasters and regional and national communications operations should be required to encourage and broadcast diverse views and programs,” wrote Lloyd. “These programs should include coverage of all local, state and federal government meetings, as well as daily news and public issues programming. (see link above for complete story)

    Pravda anyone?

    Lloyd wrote a book back in 2006 that must have caught someone in the Obama administration’s eye titled Prologue to a Farce: Communications and Democracy in America, published by the University of Illinois Press. Matt Cover explains that “Lloyd wrote Prologue to a Farce while a senior fellow at the liberal Center for American Progress. In that capacity, he co-authored the 2007 report The Structural Imbalance of Political Talk Radio”

    The report argued that large corporate broadcasting networks had driven liberals off the radio, and that diversity of ownership would increase diversity of broadcasting voices

    Did you catch that? These unfortunate liberals have been “driven” off the radio. Why wait for the liberals to produce a fairness doctrine when you’ve got a Diversity Czar under the White House’s thumb?

    NCMR 2008 Media Reform and Social Change w/Mark Lloyd 2/2

    In this video Lloyd discusses two countries and their ability to be able to make social change through their state TV: Rwanda and Venezuela. This is beyond disturbing:

    mass genocide was able to be committed by state radio in Rwanda—Chavez led an incredible revolution – a democratic revolution ——- media and social change —


    Tax his land, Tax his bed, Tax the table At which he’s fed. Tax his tractor, Tax his mule, Teach him taxes Are the rule. Tax his work, Tax his pay, He works for peanuts Anyway! Tax his cow, Tax his goat, Tax his pants, Tax his coat. Tax his ties, Tax his shirt, Tax his work, Tax his dirt. Tax his tobacco, Tax his drink, Tax him if he Tries to think. Tax his cigars, Tax his beers, If he cries Tax his tears. Tax his car, Tax his gas, Find other ways To tax his ass. Tax all he has Then let him know That you won’t be done Till he has no dough. When he screams and hollers; Then tax him some more, Tax him till He’s good and sore. Then tax his coffin, Tax his grave, Tax the sod in Which he’s laid. Put these words Upon his tomb, Taxes drove me to my doom…’ When he’s gone, Do not relax, Its time to apply The inheritance tax. Accounts Receivable Tax Building Permit Tax CDL license Tax Cigarette Tax Corporate Income Tax Dog License Tax Excise Taxes Federal Income Tax Federal Unemployment Tax (FUTA) Fishing License Tax Food License Tax Fuel Permit Tax Gasoline Tax (currently 44.75 cents per gallon) Gross Receipts Tax Hunting License Tax Inheritance Tax Inventory Tax IRS Interest Charges IRS Penalties (tax on top of tax) Liquor Tax Luxury Taxes Marriage License Tax Medicare Tax Personal Property Tax Property Tax Real Estate Tax Service Charge T ax Social Security Tax Road Usage Tax Sales Tax Recreational Vehicle Tax School Tax State Income Tax State Unemployment Tax (SUTA) Telephone Federal Excise Tax Telephone Federal Universal Service Fee Tax Telephone Federal, State and Local Surcharge Taxes Telephone Minimum Usage Surcharge=2 0Tax Telephone Recurring and Non-recurring Charges Tax Telephone State and Local Tax Telephone Usage Charge Tax Utility Taxes Vehicle License Registration Tax Vehicle Sales Tax Watercraft Registration Tax Well Permit Tax Workers Compensation Tax STILL THINK THIS IS FUNNY? Not one of these taxes existed 100 years ago, and our nation was the most prosperous in the world. We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids. What in the hell happened? Can you spell ‘politicians?’ ITS TIME TO GET RID OF THESE BASTARDS….CONSTITUTIONAL ONLY !!!! OR EXECUTION !!!!!!

    • Fred the Protectionist

      “What in the hell happened? ”

      The Free Traders got what they wanted, they wanted to remove and replace the Tariff with an income tax. The only problem is; while Tariffs are limited, taxes on income are unlimited.

      Good job free traders, well done.

      Taxes on income “from whatever source derived….without regard to any census or enumeration”

  • Darin

    I think a short history lesson will explain to most of us why we are in such a pickle.

    Please feel free to share the link. The information here is something that should again be taught in public schools.

    Thanks to everyone who watches.

    • VR

      Thanks for the reminder of that for which we are striving.
      This was a single assignment in Civics class many years ago.
      I am afraid that the oligarchy has been here for many decades and is now out of the closet.

      I have a take on the political spectrum that is a circle. Too far left or too far right, we end up in the same place ….. the wrong side of the circle. This circular spectrum might also explain why, for the people, too far right or left does not look much different.

      I welcome your response.

  • Lindsey Brutus

    Jason: The free market is indeed the best regulator. The SEC will never be our savior because it is so understaffed. Besides, a lot of Madoffs so called investments weren’t SIPC insured anyway so they didn’t even come under SEC jurisdiction. Anybody that invested with this guy got returns that were unrealistic and as the old saying goes, “anything that seems to good to be true probably is”. Madoff’s investors got burned because they didn’t do their homework. If they did they wouldn’t have invested with him!

  • jason

    “The free market does not regulate, it only punishes AFTER bad decisions have been made.

    A strong regulating body is needed to stop excessive risk taking place BEFORE it becomes a problem. And in fact, even the fear of punishment doesn’t affect the business owners as they had acquired enough money to move to another country and live a happy life if they’re company collapsed.

    Would you completely ditch the police force and only punish people once they break the law? It is exactly the same principal, you need prevention as well as post-punishment.”

    Well.. my response to the statements above are that I agree with the first statement. I agree that a stronge regulating body needs to be put into place. We already were supposed to have that body. It’s called the SEC. They dropped the ball BIG TIME with the housing bubble and Bernie Madoff’s 50B scheme. However, even more important than the regulating body to stop excessive risk is making people play with their own money. Suddenly, all that excessive risk stuff fixes itself when a company is “betting” with its own money. Instead, these criminals with some help from the SEC made insurance for their insurance for their insurance scams that ultimately were going to be insured by the government. As Warren Buffet said…. I don’t care who’s insuring all of this stuff. Even if it’s the federal government, if the system itself is unsound, its going to collapse.

  • Sara Reckelhoff

    Before you start talking down the free market, please read “The Creature from Jeckyll Island.” Everything going on in our economy and our country, for that matter, will be made crystal clear. It was a real eye opener for me and the reason I want to fight to get back what the forefather’s had originally planned for the United States.

  • mike

    Our Financial Markets are not Fixed
    Obama sorry has not taken any bold decisive action at all with the financial markets. Goldman Sachs doesn’t under stand conflict of interest WE NEED TO CORRECT THIS THE PEOPLE WANT JUSTICE

  • mike

    I strongly believe we need a federal reserve audit. The recent stock market action suggests to me the federal reserve is intervening in a free and open market. I believe the biggest beneficiary of this TRILLION DOLLAR stock market move in a couple of weeks was Goldman Sachs. Goldman Sachs sells derivatives in our equity markets its apparent that Goldman Sachs Has Total Control Over our stock market using the unlimited capital available from the federal reserve. I believe Goldman Sachs doesn’t have the best interest of our markets. They are misusing the federal reserve to manipulate the stock market and making huge 100 BILLION DOLLAR profits THIS IS ILLEGAL people expect our government to obey the laws just like citizen. Also this manipulation without regards for cost continues to put our government and the people more and more in debt



    • Matt

      Dude, Mike… I’m speechless. Your complete lack of knowledge is encapsulated in this “Goldman Sachs sells derivatives in our equity markets”. Makes as much sense as ‘I sell cars in your refrigerator’. Genius. Thanks for enlightening me. I won’t even touch the “apparent that Goldman Sachs Has Total Control Over our stock market using the unlimited capital available from the federal reserve.” MWAHAHAHHAHAHAHAH Yes!

      Leave it up to Ron Paul supporters, some of them never cease to amaze me with the utterly insane conspiracy theories. Proving over and over again, lack of knowledge or humility never keeps a good conspiracy theorist down! Weather control anyone?

      • longshotlouie

        Matt seems to think he is posting on one of the MSM sheople sites.
        I guess every site needs a jester.

        Thx 4 the laughs, Matt

        • Matt

          Louie seems to think this should be one big mental circle-jerk where anyone should just post whatever you want and claim ‘intelligence over the MSM’ even if you have no idea what you are talking about. Who wants debate or mutual education.

          Don’t forget to wear a glove just in case you pass out while staring at the computer screen Louie, wouldn’t want you to chafe.

          So Mike, I’ll ask the questions that the ‘MSM Sheople’ ask, and the ‘Ronbots’ apparently not only will not, but don’t care about. Conspiracy and brotherhood over facts and education!

          Mike, would you please enlighten us ‘Sheoples’ how it is possible to “sell a derivative in our equity markets”? After you explain that, please enlighten me on the mechanics of why someone would need unlimited capital to sell said derivatives? Being that derivatives are NOT a component of stock market indices and simply backed by whatever underlying equity is agreed upon, how did that influence the stock market indices (which are comprised of equity components and NOT derivatives)? Finally, I am most interested in learning how Goldman Sachs can sell and… the market increases by one trillion dollars? Last time I heard BUYING makes the market go up and SELLING makes it go down? I mean, even if they dumped unlimited capital into the market, you don’t think there is about a hundred thousand times the capital itching to be the company that figured out the gig and ‘brought down Goldman Sachs’. There is no honor among theives, or Wall Street. Get real.

          I am sure it is just a lack of knowledge on my part, but if I am to be enlightened such as Louie (for whom I still predict another completely uninformative comment), I would like to know a bit more of the mechanics.



          • longshotlouie

            Nice, now do that one-handed head stand while ringing a bell.

          • Matt

            I get the impression mental acrobatics are obviously not your gig, Louie. Keep following your brand of Sheople, the grownups are talking right now.

            Mike has determined “Goldman Sachs sells derivatives in our equity markets (and) its apparent that Goldman Sachs Has Total Control Over our stock market.”, while the questions I raised might be too tough for you, this “jester” for one has raised legitimate points on the line of thinking used by one to arrive at that conclusion.

            One: Market indices are NOT comprised of derivatives
            Two: Equity markets are COMPLETELY separate of derivative markets (e.g. by definition you CANNOT ‘sell a derivative into an equity market’)
            Three: On the false premise that derivatives even COULD affect indices, how did Goldman Sachs take unlimited capital, SELL derivatives, and make markets go up?!?! When you SELL markets go down!
            Four: When you SELL derivatives naked you keep the premium. Why would they need capital if they SOLD something, you would need unlimited capital to BUY something, right? If they used the capital to buy and then sold derivatives against the equity you would only keep the time value, your profit would be capped, and you would still be at the mercy of the sell side with a depreciating asset.

            I look forward to your input, Louie.

          • longshotlouie

            Not at all surprised, Mattie
            You seem to be under many odd impressions.

            But, you do recognize that the acrobatics is not my gig, it is yours. Damn shame that you didn’t choose critical thinking instead.

            You can continue to beat the dead miniature horse while we enjoy the entertainment. Can you do that one-legged hop with the pony keg on your head?

          • Matt

            Straw man fallacy Louie.

            Let me know if you have answers to any of my questions.

          • longshotlouie

            Jugglers and impostors do daily delude them.

            Straw man? Where? Is this about your acrobatics?
            When did you become interested in answers for your circular arguments?

            Now, don’t give a damn about your questions, show us some more cartwheels. Follow that up with some more of your smartass obamagibbs retorts.

            Do it with a smile.

          • Matt

            “Now, don’t give a damn about your questions”

            Then stop responding. This does prove once again you don’t let common sense and an actual understanding of how markets work keep you from stupidly attacking someone who is asking for clarification on a completely baseless conspiracy theory!

            Maybe I’ll post this on Youtube, then you’ll believe your electronic god.


          • longshotlouie

            Could you just continue to beat that miniature dead horse. The humor breaks are healthy.

            Do you sing?

          • Libertarian777

            Matt, while I agree with you that Mike’s comments are basically nonsensical, one of your responses to him are incorrect too:

            Two: Equity markets are COMPLETELY separate of derivative markets (e.g. by definition you CANNOT ’sell a derivative into an equity market’)

            Equity markets are not ‘completely’ separate of derivative markets. The futures markets for equity indices more often than not, drive the actual index. Why? because there’s an arbitrage opportunity if they were completely separate. The arbitrageurs make profits on the difference, and as more of them enter into contracts to capture that profit the difference between the futures and the index narrows.

            Another pattern to look out for is the options expiration (triple or sometimes quad witching) expirations weeks. The equity indices are manipulated by high frequency trading firms to make their options worth more on expiration date (e.g. sell all 30 dow component stocks to drive prices down to make your put option worth more on expiration). They normally can only make such effects on lower volume days though.

          • Forest

            “The futures markets for equity indices more often than not, drive the actual index. ”

            Not true. In simplistic form, and by definition, futures are ‘derivaties’ and as thus ‘derive’ their value from the underlying index. Futures markets attempt to *predict* movements in the components of the indices by modeling the impact of data points upon the individual equities/components.

            As thus, you can’t simply drive an index by purchasing futures/options as the moneyflow in index futures is going to be very small, in addition if the components of the index have contra information that would also create an arbitrage opportunity. In addition, there are not only a buyer and a seller on the future, but there is a buyer/seller on the underlying, as well as there are buyers and sellers on options of the underlying – ALL of which theoretically have the capital to solidify/fortify their position within the index or their component of the index so as to continue the search for a ‘correct’ valuation.

            Your other comment RE: Options Expiration: “The equity indices are manipulated by high frequency trading firms to make their options worth more on expiration date ”

            If it were such easy money to bet against manipulation that isn’t based on perceived fundamentals, wouldn’t there be a veritable dearth of hedge funds/institutional investors that would LOVE to spring that trap? Again, why do y’all think there is honor among perceived thieves?

  • sean

    Seven Deadly Sins of Deregulation

    Sin One: Allowing Mortgage Lending to Become a Casino.

    Sin Two: Allowing Unregulated Bond Rating Agencies to Decide What was Safe.

    Sin Three: Failing to Police Sub-prime.

    Sin Four: Failure to Stop Excess Leverage.

    Sin Five: Failure to Police Conflicts of Interest.

    Sin Six: Failing to Regulate Hedge Funds and Private Equity.

    Sin Seven: Repeal of the Glass-Steagall Act.

    • Nate Y

      Nearly all of these sins were enabled and encouraged by the Fed’s extremely loose monetary policy. Throw in the moral hazards of Fannie and Freddie (along with other government distortions) and you set the stage for economic disaster.

      In a free market, these sins cannot exist for any extended period of time. The free market quickly corrects such excesses and punishes those responsible for them. If some company wants to leverage itself 40:1 they are free to do so. However, as a natural consequence, that business will quickly find itself bankrupt (thanks to free market forces). This sends a signal to others. That signal is “Don’t be a jackass and leverage yourself 40:1 or you’ll destroy yourself.” That is a good thing. Unfortunately, the government decides to intervene and prevent the correction from happening. This only serves to perpetuate and exacerbate the problem.

      • sean

        Loose policy… exactly, it needs to be tightened. And these businesses had nothing to do with the fed because they are not depository banks. It was a lack of policy that encouraged unsound lending practices. Even during the “free-banking era,” banks were regulated with sound policies.

        In a totally free market with sound money and A BALANCED TRADE, we would be very prosperous. But, talking about the topic on hand.. in the situation we were in, if we didn’t bail out the companies than you could kiss goodbye all of our pension funds. 60% of our countries assets would of gone down the drain.

        • Nate Y

          Well then you are at odds with your boys Krugman, Keynes, and Bernanke. Easy money is their default position.

          The idea that “these businesses had nothing to do with the fed because they are not depository banks” is completely naive. As if the interest rate is only relevant for cash deposits.

          Again, you have the cart before the horse with your sound money/balanced trade argument. Sound money is necessary to ensure balanced trade. Not the other way around.

          Wait, what’s this!? You’re right back to your Keynes/Krugman nonsense. Washington did not need to bailout Wall Street. The bailouts didn’t address the cause of the disease. They only remedied the symptoms for a short while. The government has not allowed the market to correct the distortions and imbalances. And in the coming months and years, we will have to reckon with the consequences.

          • sean

            Investment firms don’t have to pay “federal interest” whenever they borrow money from pension funds.

            A stronger currency promotes more imports because it makes them cheaper.

            These securities were bundled together, and nobody knew who owned what, so the investment firms couldn’t go through normal bankruptcy liquidation.

  • VR

    Economics in One Lesson

    There is no need to be a cow to know milk.

  • VR

    “By what moral right do we have to create purchasing power out of thin air? Whether it is done by the creation of credit or Federal Reserve notes or whether it’s the creation of SDRs and international in scope, by what right do they do this? Is it any more moral to dilute the purchasing power of the money you hold in your wallet than it is for the farmer to dilute the milk supply with water?”

    -Dr. Ron Paul 1983

  • TimD

    The free market does not regulate, it only punishes AFTER bad decisions have been made.

    A strong regulating body is needed to stop excessive risk taking place BEFORE it becomes a problem. And in fact, even the fear of punishment doesn’t affect the business owners as they had acquired enough money to move to another country and live a happy life if they’re company collapsed.

    Would you completely ditch the police force and only punish people once they break the law? It is exactly the same principal, you need prevention as well as post-punishment.

    • longshotlouie

      Should we punish before a law is broken?

      There is no better regulator than the free market.

      • TimD

        “Should we punish before a law is broken?”

        No, definitely not. But if a law is obviously about to be broken, the police should (and do) intervene.

        Why don’t we keep an eye on the biggest and most economically important companies to make sure they aren’t about to fail or take excessive risk?

    • Nate Y

      In a free society, no one is punished until after he/she has done wrong (for example, broken the law).

      You speak as if the only form of prevention is the State. This is totally unfounded. Individuals are quite capable of learning from mistakes (their own and those of others) and of checking their poor behavior. Being a good person is very much in one’s self-interest. Also, as history and recent events have shown, it is the State (the regulators) who create the systemic risk and then protect the greedy and reckless at the expense of the frugal and prudent.

      The free market is the way to go.

      • sean

        TOo bad there is only a select handful of people who agree with a totally free market. It would be a lot easier to get ron paul’s advice through if more people thought like him.

        Well it was deregulation that brought down the house.. Maybe these businesses wouldn’t be “too big to fail” if they didn’t use our pension funds.

        • VR

          Too bad there is only a select handful of people that remember what a totally free market is, and is not.

        • Nate Y

          “Well it was deregulation that brought down the house.. Maybe these businesses wouldn’t be “too big to fail” if they didn’t use our pension funds.”

          This perfectly illustrates how completely out of step you are with essentially everyone else who posts on this site. If you believe that deregulation was/is the problem and we just need the right philosopher kings in the proper places of power, you would be much better served posting on a LaRouche, Krugman, or Obama website. Yet you do not. Your actions are no different than those of the religious fundamentalists who post on websites with an atheist bent. You set out merely to provoke, annoy, and distract.

          • sean

            The businesses that failed were completely deregulated with no government intervention. That is a fact.

            The businesses that failed were “too big to fail” because the money came from our retirement funds. That is a fact.

            I’m just pointing out the facts. You can complain and argue all you want. Your not going to change the facts.

          • VR

            As you’ve been told, you point at symptoms instead of cause.

            Your favorite things seem to be circles and bubbles.

          • sean

            I don’t understand you.. I guess you support letting these businesses lend more than they are capable of. And I guess you think that letting them do this and whatever they want is “helpful” to our economy.

          • VR

            If they have poor business practices (lending more than they are capable of) they fail in a free market.

            No need to worry about failure if the taxpayer will bail you out.

            Morality Hazard

          • sean

            No VR. If these businesses didn’t borrow money from our retirement funds, than we wouldn’t have to bail them out..

          • VR

            ‘Borrow’ would indicate an intention to repay.

            Haven’t heard about any of these corps promising to repay the stolen retirement funds.

          • sean

            They wouldn’t be able to repay if they went under. Everyones money would be lost… They do pay pensioners back, you don’t know what you are talking about.


          • VR

            Wake Up, Rumplestiltskin.
            NOONE is getting their money back. In fact, we are going to pay the gambling losses of the corps after losing our retirements.

            How odd that you continue to defend a broken system.

          • sean

            lol! I’m not defending a broken system. I’m saying it needs to be fixed.

            How do you know “NOONE is getting their money back?” Says who? says you? Please show me some evidence of this or show me where someone else says this.

            You are arguing just to argue. What a joke. Please educate yourself.

          • VR

            Except that your repair job calls for more of the same by those that created the problem.

            Borrow, Spend, and Inflate, with criminal oversight.
            You can hear The Joker laughing.

          • sean

            There was no oversight! That is why these businesses failed. They didn’t have sound banking rules.

            Your gibberish is more of the same.

          • VR

            ¿Es que no entienden el idioma Inglés?

            My last response was not about the past. It was about what you support.

            Sound banking needs sound money as one of it’s ingredients, and it must have free market to expose unsound business practice.

            Again, they pulled these stunts because they could. They knew that you and I would pony up the losses, as if we had a choice.

        • VR

          The bottomline is that we are creating the new bubble with dollars of decreasing value instead of letting the market shed it’s excesses. The day of reckoning is just pushed down the road to our kids and their kids, if it actually worked. Can anyone point to where it has worked before?

          When it doesn’t work, the DoR is at the Door.
          Prepare for either eventuality.

          • sean

            I’m pretty sure you said “more of the same” which means you were talking about the past.

            Sound money needs balanced trade. You need regulators to expose unsound business practices. Deregulation prevented these businesses to reveal how much leverage they were taking on.

            Exactly, they pulled these stunts because they could. No regulation allowed them to do whatever they wanted.

            The bottom line of this topic of discussion is that the unregulated banks failed.

          • longshotlouie


            Your ignorance is astounding.
            If you had the ability to comprehend English, it would be no problem for you to understand that the ‘subject’ of the first line in VR’s reply was about ‘your repair job’.

            “Sound money needs balanced trade.” ????
            More ignorance beyond description.
            First, we don’t have sound money.
            Second, balanced trade comes through production. Hard to balance trade when you produce little.
            Third, the policies that you support add to this imbalance.

            With more regulators than ever before in history they couldn’t take care of business. You can stack up regulators to look like the Rocky Mountains and nothing would change. To understand why:

            Your IPOS heros have regulated and inflated us right out of a productive economy.

            Hey Sean, you’ve been punked ……………….. again.

          • sean

            First of all.. Productivity moves to wherever it is cheapest. The policies that I support would make it cheaper to produce here than elsewhere.

            2nd. The reason why goldman sachs has so much power and control over the economy is because they were not regulated and they grew too fast and too big from unsound(unregulated) banking policies.

            3rd. More regulation=Less inflation, so only god knows why you support less regulation.

            Συγνώμη για τα αγγλικά μου

          • longshotlouie

            κατανόηση είναι το πρόβλημα, δεν είναι η χρήση

            The reason GS has so much power is their representation in government and central banking.

            The Bermuda Triangle of Money

          • sean

            umm no. Goldman Sachs was unregulated if you understand what that means. No government involvement whatsoever. The shadow banking system competes with the central banking and actually rose above owning 60% of our total assets (homes,cars,business loans..)

          • sean

            You do know what an asset is don’t you?

            b : the entire property of a person, association, corporation, or estate applicable or subject to the payment of debts

          • longshotlouie

            Again, your condescencion does not replace logic.

            GS was literally ‘unregulated’ because of their representation in government and central banking. There is no way to run from this.

            Shall we go around the maypole again?

      • Matt

        “In a free society, no one is punished until after he/she has done wrong (for example, broken the law).”

        Wait, why would there be laws in a ‘Free Society’? If all these arguments are for ‘Free Markets’ where the complete absence of government intervention results in a utopian plain where all wrongs are righted in a ‘Natural and Wise’ fashion – why can’t we apply that same principal to society and have it work?

        If we want a Free Society get the government the hell out of all of all laws, regulations and everything and just let humans govern each other in real time. No rules, no laws, no bible, just let people work it out and let the strongest win!

        I like it! Genius! I mean, no society that has ever had laws has been truly successful, right? Everything ALWAYS fails eventually, so that statement has to be right. I think we are on to something!

        • Nate Y

          What on Earth are you talking about dude? Way to prop up and knock down (via sarcasm) a bloated strawman. You seem to think that government is the only source of law. This is not the case. No one in the “Liberty Movement” is arguing for your perverse “might makes right” nonsense.

          It is very important to remember that “my freedom to swing my fist ends at your nose”.

        • longshotlouie

          Dramaticus Blovious?

        • VR

          What I hear you saying is:
          Trust Government, Not People