Was Hayak right or what? Is he still right post 2008?

Was Hayak right or what? Is he still right post 2008?

How would 2008 prove him wrong? The only problem was that the bank's weren't allowed to fail

Asymmetry of information is what caused the banks to become so toxic though, overselling mortgages to people that didn't understand the full context while the banks did. Natural result of the market. Invisible hand indeed!

Why would the bank's sell mortgages to people who couldn't afford them?
I posit it is because of the existance of Fannie Mae and Freddie Mac who were buying them for more than they were worth, because of their implicit government guarantee, which later became an explicit one, allowing them to privatize gains and socialize losses.
I view 2007 not as a failure of the market but of the government to line up incentives properly with the rules

The consequences of allowing all banks to fail would've been catastrophic. I do think they should've been held legally responsible for the crisis though

Not all the banks would fail though, and many could be absorbed partially and fully by other banks, as those banks chose. And if they were bad they could collapse.
The pain would be tremendous, but you have to remember that 2007 had the slowest recovery anyways.

The Austrians are right in theory, wrong in practice.

Should've been nationalized and consolidated or had to cede a majority share to the gov in exchange for those bailouts, in addition to having the executives jailed and blacklisted for white collar crimes, forever. They could learn to lay bricks for a living, in prison, instead.

Because those shit mortgages could be bundled together into a better looking package and sold with a better investement rating than the junk rating that any single shit mortgage would get. The thinking was that the risk of defaulting on any one mortgage was dilluted over the aggregate.

These packages sold like hotcakes. Real estate became super-overvalued. It had become a bubble.

The thing is, the banks that would give you money to pay for your home used to be unable to make these sort of risky plays. But the separation between commercial banking and investment banking was repealed in the 90s or around that time and they became these huge monstruous domino pieces.

>Should've been nationalized and consolidated or had to cede a majority share to the gov in exchange for those bailouts, in addition to having the executives jailed and blacklisted for white collar crimes, forever. They could learn to lay bricks for a living, in prison, instead.
I think that's really unfair as well.
Nationalizing banks is bad because it ensures a safe place to put your money, as a nationalized bank cannot fail, because why would you put your money into a 10 year bond, for a 2% return when you can put it into a bank account with a 3% return and cashback, etc.
Also, what they did wasn't illegal. I would like you to tell me what law they broke.

Sure, and?
It's a failure of the bond rating agencies. People have made poor investments all the time, look at people who put money into baseball cards, beanie babies or fidget spinners.

>this is your brain on Nietzsche

Rating agencies are bankrolled by the orgs that give them the investment opportunities they want to have rated. It is a terrible conflict of interest.

Pretty sure that offering CDOs while shorting them is a blatant conflict of interest, and they never told their clients about it. Not to mention that their fuckery didn't just affect them. Otherwise no one would've given a shit.

What's fun is that Hayek supported a welfare state and regulations to protect the environment. Modern conservatives would call him a liberal.

I liked the part where the bond rating agencies dinged the US's rating as retaliation.

Interest would probably just be standardized to the bond rate though.

>non mathematical economists

I can guarantee you people who read mathematical economists can read non-mathematical economists.

But the plebs who shitpost Hayek and Mises all day would never dream of reading anything with equations in it!!!

Where does this come from ?

orgyofthewill.net
The second greatest philosophical treatise of our age.

Right more than ever. Fthe ever growing centralization of power and wealth threatens both economic and personal liberty, people trrating priviliges as "freedom", pushing for more socialization of risks and costs without any gradual development towards those ends,... Its the left and right going autistic at the same time and Hayek being spot on consistently.

People are forgetting the values of liberty and a re pushing for social justice or nationalism just for the sake of it, thinking they can coerce others and engineer them to their liking.

Im reading through the Constitution of librty atm and its hilarious how current his remarks are.

Right about a fair amount, prices, markets, certain stuff about liberty.

Wrong about a lot of other things (this can be said of almost any economist dead for a few years in some fairness, even if he largely moved away from actual economics for a lot of his later work).

He's by far the most reasonable 'Austrian' and reading him alongside the likes of mises, rothbard etc. it should be clear how insane the latter are.

>the banks
investment banks made these mortgages because the government was willing to buy them, commercial banks bought bonds from Freddie and Fannie backed by the worthless mortgages

Some of that is encouraged
It's called hedging your bets.

He even disagreed with their a priori methods of analysis. That is, he said "hey lets see what works" and they were like "lets see how we can fit facts to suit laissez faire ancapistan". They were ideologues, Hayek was the rational one.

>regulations to protect the environment.
This was about negative externalities

If I don't paint my house, my neighbors will start to grouse. I may not get invited to the next block party. Hayek contends that those who value liberty should prefer social pressure against "deviant" behavior to outright bans. If I highly value having a house painted mauve, I can ignore my neighbors' mocking glances and jeers. But if the government regulates house colors, I'm stuck.

Then there's FDIC insurance.
If people have accounts that have a higher balance than the FDIC insurance cap, they're effectively putting their money in a safer place. Nationalizing banks has a lot of problems because a bank owned by the US government will be the "best bank" and undermine other institutions

Hayek was a based Austrian, Murray and Rothbard were two insane jew ideologues.

If it's the best bank, why not nationalize now? The only people who lose out are some 0.01%er Jews, while everyone else benefits by your own admission. Why do you put private profit over practical efficiency?

>implying that a nationalized entity is economically more efficient than a private one

Must be nice living in La La land.

Right. That was me being unclear. Thanks for calling me out
I mean it's the best bank for consumers, not that it is the best bank in general. It's bad for the system as a whole, because the bank cannot fail and doesn't have the same prudence

But banks already can't fail. We have seen this is true. Given that will be the case regardless of who runs the bank, is it better to have rapacious kikes running the bank, or spooky government bureaucracy? I'd say the bureaucrats are better. It is, as you say, better for the consumer, and their motives aren't quite as antisocial.