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May 9, 2010, 2:44 pm
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Government’s Role in the Financial Crisis

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Sunday, May 09 2010 @ 05:44 AM UTC

Contributed by: Admin

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Economy Crumbles

George Soros is planning to set up an economics institute at Oxford University—in order, apparently, “to steer the discipline away from the champions of the free market and deregulation who, the billionaire financier believes, share the blame for the global economic crisis.” He is frustrated by “the way global financial markets work on the premise that markets can be left to their own devices.”

Government’s Role in the Financial Crisis

by Kevin Carson
Center for a Stateless Society
May 7, 2010

George Soros is planning to set up an economics institute at Oxford University—in order, apparently, “to steer the discipline away from the champions of the free market and deregulation who, the billionaire financier believes, share the blame for the global economic crisis.” He is frustrated by “the way global financial markets work on the premise that markets can be left to their own devices.”

Ian Goldin, director of the James Martin 21st Century School, applauded the move on the grounds that it would “broaden the debate.”

We need to broaden the debate, all right. In particular, we need to broaden it beyond two sides—neoliberals and “Progressives” — who agree that the global finance capitalism we’ve had in recent decades was a “free market.”

Just for starters, the market in mortgage-based securities is almost entirely a creation of the federal government. Before the feds created Freddie Mac to guarantee MBS’s, they were shunned as too risky by the vast majority of investors. Until then, derivatives were mainly stodgy investments in commodities futures used by farmers as a form of insurance against a catastrophic fall in prices.

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