Monday, October 20, 2008

Attn Socialists, The Free Market Works

The housing bubble has been fingered by most economic experts as the root cause for what we are experiencing through out the financial world. It has also been the main point of contention by those who say that free market capitalism is ineffective. In reality it was the governments involvement that was forcing banks to make loans to folks who had no business receiving home loans, but that is a subject for another post.

It was announced today that as prices have began to fall on overpriced homes. Sales are increasing, and we're not talking about a little bit.

LA JOLLA, Ca. -- Southern California home sales shot up by an unprecedented
65 percent last month from the dismal, record lows of a year ago, when a credit
crunch slammed the brakes on home financing. September sales also posted a rare
gain over August as price cuts lured more buyers. Foreclosure resales rose to
half of all transactions.

Here is the full story if you care to read it. Here is the point. The free market works. We don't need a bail out. We don't need the government stopping foreclosures. We don't need more government intervention. We need less. The market will correct itself. Government intervention will only prolong the downturn.

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