Jeff Lawrence, Libertarian

Debating the Economic Meltdown-by Jeff Lawrence

Delia Lopez (R) is sponsoring a debate on Saturday with Democratic candidate John Sweeney and Green candidate Michael Meo. Had I participated, I would have focused on the role that government intervention played in the meltdown. You see, people and companies, including financial institutions, act rationally and consistent with the rules of the game established by law. If the rules are lame, the outcome is lame. With respect to the meltdown that was triggered by the housing bubble, here's my cut with a few edits from my friends.

First and often ignored is the fact that land use regulations in places like California and Oregon have materially impacted real property prices as they make developable land scarce. The Federal Govt. got into the act by trying to social engineer home ownership through banking regulations that lowered lending standards and increased allowable leverage. To accelerate high risk lending, the Feds stepped in with guarantees through Freddie and Fannie and mortgage insurance. Deliberately loose monetary policy created an environment of ‘easy money’ for the banks, made even easier with federal guarantees and new compliance rules designed to lower lending standards and grow leverage. Banks rationally competed for business and for high marks from their federal regulators. Builders rationally capitalized on the ‘amazing’ mortgage products available to their buyers and added cheap illegal labor to build as much and as fast as they could. Consumers and investors bought as much as they could as prices rose as all of these government interventions drove unsustainable supply and demand. Businesses and individuals acted rationally, perfectly consistent with the rules that the government had established; rules that were based on poor risk management and government guarantees.

The bubble and collapse were inevitable. Then, to make matters worse, we elected leaders who believe that more government intervention is the answer. After the bailouts, they further paralyzed the system by taking an additional trillion dollars to share with their friends and grow an already unsustainable government. Add looming tax increases and the hostile takeover of the health care system, and I'm amazed anyone is still in business. But I can tell you how producers keep going because I watched my own team perform under incredible pressure this past year. We rose to new levels of productivity to enable our collective survival. We went to bed hungry and got up early. Unlike the government, our individual livelihoods and compensation are tied to both our own individual production and the survival and performance of our company. We met deliverables and increased performance with shrinking resources through innovation and human expansion. Just like you other producers that keep this economy going, we created real value. This is how we all survive. Enterprise is sustainable. We need to let it live. To my representatives, I say please, stop the social engineering. To my friends in District 3, I ask you to please vote for real sustainability. Join me. Stand up for life, liberty and privacy. The long road back to sustainability starts with us. StandAgainstTheMachine.