New Op-ed up at Fox News: "Financial Markets Are in a Mess"
Politicians always seem to know better. Not satisfied with telling people what types of light bulbs to use and the size of cars they can drive, politicians in Washington have decided to replace financial markets and try legislating away the laws of supply and demand.
Last week congressional democrats introduced regulations to stop what they complained were "wild interest rate hikes" on credit cards. Before that Hillary Clinton advocated a 90-day moratorium on foreclosures and a five-year freeze on interest rates for sub-prime mortgages.
Yet, price controls don’t solve the problems with high interest rates. If people want to borrow more money than is available, interest rates rise, both to attract more to lend and insure that those who need what scarce money there is, are the ones who get to borrow it. If regulations prevent interest rates from going up, you get shortages and credit rationing. . . .
The main point of the op-ed is how government regulation created the current mess.