the day the free markets died.
what a sham.
paulson should be ashamed of himself.
free markets mean just that.
he made all his money from it.
what with northern rock and now this weeks debacle the central banks and treasury officials might as well have converted to communism.
An Open Letter to the United States Congress:
We, the undersigned economists, write to strongly advise against excessive new
regulations or federal interventions as a response to current trends in the housing market. Market
corrections have already begun, with financial institutions writing down bad debts and adopting
new lending standards to avoid future foreclosures. Legislation to create new underwriting
standards will reduce competition and restrict consumer access to credit. Additionally, efforts to
bail out or shore up lending institutions create a moral hazard that would slow the adjustments
required in the marketplace.
Government solutions, as opposed to the current market correction, would create changes
whose effects will linger long into the future. Legislative proposals have included expanding the
role of government sponsored enterprises, mandating new underwriting standards, allowing
bankruptcy courts to rewrite the terms and conditions of mortgage contracts, and expanding
liability to those who securitize loans. These proposals would fundamentally alter the workings
of the mortgage market, leaving consumers with fewer choices when seeking to buy a home and
potentially increasing taxpayer exposure for bad loans.
It is important to realize that the market for subprime mortgages has provided consumers
with greater access to credit and new opportunities for home ownership. Current laws provide
the necessary authority to address abuses that have occurred and, in light of recent market
activity, lenders have already responded with tighter standards to avoid potential foreclosures. In
fact, more than 80 percent of all sub-prime mortgages continue to be paid on time.
Opposing excessive new regulations is important as the subprime mortgage market
adjusts to existing market conditions. Access to such mortgages has provided more benefits than
harm to consumers, and through market discipline, lending institutions are taking the necessary
steps to address the problems that have emerged. Forcing taxpayers to bear the costs of this
adjustment is unwarranted and reduces the incentives for financial institutions to correct past
behavior. Additionally, new regulations or underwriting standards will restrict consumer access
credit and hinder the marketâs correction.
Sincerely,
Michael Alexeev, Indiana University
Charles W. Baird, California State University â East
Bay
L. Dwayne Barney, Boise State University
John J. Bethune, Barton College
Don Bellante, University of South Florida
Samuel Bostaph, University of Dallas
Bruce Caldwell, University of North Carolina -
Greensboro
Noel D. Campbell, University of Central Arkansas
Bryan Caplan, George Mason University
John Conant, Indiana State University
Eleanor D. Craig, Delaware University
Richard Ebeling, Foundation for Economic Education
James R. Edwards, Montana State University â
Northern
Frank Egan, Trinity College
Frank Falero, California State University
Price Fishback, University of Arizona
Arthur A. Fleisher, III, Metropolitan State
College of Denver
Fred Foldvary, Santa Clara University
B. Delworth Gardner, Brigham Young University
James F. Gatti, University of Vermont
David E. R. Gay, University of Arkansas
Erik Gartzke, University of California - San Diego
Adam Gifford, Jr., California State University
Micha Gisser, Rio Grande Foundation
Charles J. Goetz, University of Virginia School of Law
Peter Gordon, University of Southern California
Gerald Gunderson, Trinity College - Hartford
Frank Hefner, College of Charleston
Robert Heidt, Indiana University School of Law â
Bloomington
David R. Henderson, Hoover Institution
William D. Hermann, Golden Gate University
Melvin J. Hinich, University of Texas â Austin
Mark Hirschey, University of Kansas
Steve Horwitz, St. Lawrence University
James L. Huffman, Lewis & Clark Law School
Thomas R. Ireland, University of Missouri â St. Louis
Michael C. Jensen, Harvard Business School
David L. Kaserman, Auburn University
George G. Kaufman, Loyola University Chicago
David N. Laband, Auburn University
Deepak Lal, University of California - Los Angeles
Philip LeBel, Montclair State University
Dwight R. Lee, University of Georgia - Athens
Bill Marcum, Wake Forest University
Barry J. Seldon, University of Texas at Dallas
Stephen Shmanske, California State University â East
Bay
William F. Shughart, II, University of Mississippi
David E. Spencer, Brigham Young University
Courtenay C. Stone, Ball State University
Richard J. Sweeney, Georgetown University
Thomas C. Taylor, Wake Forest University
Clifford F. Thies, Shenandoah University
Edward Tower, Duke University
Leo Troy, Rutgers University â Newark
T. Norman Van Cott, Ball State University
Robert Whaples, Wake Forest University
Gary Wolfram, Hillsdale College
DeVon L.Yoho, Ball State University
Stephen T. Ziliak, Roosevelt University
Affiliations for identification purposes only.
http://www.freedomworks.org/econletter/20071206.pdf
what a sham.
paulson should be ashamed of himself.
free markets mean just that.
he made all his money from it.
what with northern rock and now this weeks debacle the central banks and treasury officials might as well have converted to communism.
An Open Letter to the United States Congress:
We, the undersigned economists, write to strongly advise against excessive new
regulations or federal interventions as a response to current trends in the housing market. Market
corrections have already begun, with financial institutions writing down bad debts and adopting
new lending standards to avoid future foreclosures. Legislation to create new underwriting
standards will reduce competition and restrict consumer access to credit. Additionally, efforts to
bail out or shore up lending institutions create a moral hazard that would slow the adjustments
required in the marketplace.
Government solutions, as opposed to the current market correction, would create changes
whose effects will linger long into the future. Legislative proposals have included expanding the
role of government sponsored enterprises, mandating new underwriting standards, allowing
bankruptcy courts to rewrite the terms and conditions of mortgage contracts, and expanding
liability to those who securitize loans. These proposals would fundamentally alter the workings
of the mortgage market, leaving consumers with fewer choices when seeking to buy a home and
potentially increasing taxpayer exposure for bad loans.
It is important to realize that the market for subprime mortgages has provided consumers
with greater access to credit and new opportunities for home ownership. Current laws provide
the necessary authority to address abuses that have occurred and, in light of recent market
activity, lenders have already responded with tighter standards to avoid potential foreclosures. In
fact, more than 80 percent of all sub-prime mortgages continue to be paid on time.
Opposing excessive new regulations is important as the subprime mortgage market
adjusts to existing market conditions. Access to such mortgages has provided more benefits than
harm to consumers, and through market discipline, lending institutions are taking the necessary
steps to address the problems that have emerged. Forcing taxpayers to bear the costs of this
adjustment is unwarranted and reduces the incentives for financial institutions to correct past
behavior. Additionally, new regulations or underwriting standards will restrict consumer access
credit and hinder the marketâs correction.
Sincerely,
Michael Alexeev, Indiana University
Charles W. Baird, California State University â East
Bay
L. Dwayne Barney, Boise State University
John J. Bethune, Barton College
Don Bellante, University of South Florida
Samuel Bostaph, University of Dallas
Bruce Caldwell, University of North Carolina -
Greensboro
Noel D. Campbell, University of Central Arkansas
Bryan Caplan, George Mason University
John Conant, Indiana State University
Eleanor D. Craig, Delaware University
Richard Ebeling, Foundation for Economic Education
James R. Edwards, Montana State University â
Northern
Frank Egan, Trinity College
Frank Falero, California State University
Price Fishback, University of Arizona
Arthur A. Fleisher, III, Metropolitan State
College of Denver
Fred Foldvary, Santa Clara University
B. Delworth Gardner, Brigham Young University
James F. Gatti, University of Vermont
David E. R. Gay, University of Arkansas
Erik Gartzke, University of California - San Diego
Adam Gifford, Jr., California State University
Micha Gisser, Rio Grande Foundation
Charles J. Goetz, University of Virginia School of Law
Peter Gordon, University of Southern California
Gerald Gunderson, Trinity College - Hartford
Frank Hefner, College of Charleston
Robert Heidt, Indiana University School of Law â
Bloomington
David R. Henderson, Hoover Institution
William D. Hermann, Golden Gate University
Melvin J. Hinich, University of Texas â Austin
Mark Hirschey, University of Kansas
Steve Horwitz, St. Lawrence University
James L. Huffman, Lewis & Clark Law School
Thomas R. Ireland, University of Missouri â St. Louis
Michael C. Jensen, Harvard Business School
David L. Kaserman, Auburn University
George G. Kaufman, Loyola University Chicago
David N. Laband, Auburn University
Deepak Lal, University of California - Los Angeles
Philip LeBel, Montclair State University
Dwight R. Lee, University of Georgia - Athens
Bill Marcum, Wake Forest University
Barry J. Seldon, University of Texas at Dallas
Stephen Shmanske, California State University â East
Bay
William F. Shughart, II, University of Mississippi
David E. Spencer, Brigham Young University
Courtenay C. Stone, Ball State University
Richard J. Sweeney, Georgetown University
Thomas C. Taylor, Wake Forest University
Clifford F. Thies, Shenandoah University
Edward Tower, Duke University
Leo Troy, Rutgers University â Newark
T. Norman Van Cott, Ball State University
Robert Whaples, Wake Forest University
Gary Wolfram, Hillsdale College
DeVon L.Yoho, Ball State University
Stephen T. Ziliak, Roosevelt University
Affiliations for identification purposes only.
http://www.freedomworks.org/econletter/20071206.pdf
