Lame justifications for the bank bailouts

http://www.marginalrevolution.com/marginalrevolution/2009/08/a-secondbest-theory-of-libertarian-bailouts.html

This is not a justification for government bailout of banks, it's Tyler Cowen's description of capitulation to state marketism. He claims that since bankruptcy courts are not competent dealing with large financial companies, and he gives no evidence to support this claim, that the bailouts were the best solution -- so if libertarians care about what's best for the market, then they would be hypocritical if they oppose the bailouts -- both are based government involvement, he claims, so why not pick the least harmful.

Cowen fails to differientiate between a court system, which most minarchist libertarians support, and unconstitutional intervention by the state into the free market, picking winners and losers. Even anarcho-capitalism would entail a third party entity which helps settle disputes regarding contract agreements.

Cowen shows his ignorance of libertarian principles when he uses "what's best for the market" as the guiding principle a libertarian should support. Liberty and non-coercion are principles a libertarian supports, not necessarily "what's best for the market". Most pragmatic statists can't fathom these principles.

According to Cowen's logic, if someone disseminates factual information that hurts the market, then the state would be justified censoring the information and violating free speech, and libertarians should embrace such a violation.

Comments

[bonusman]

In Africa etc. there is a lot of corruption and that is very bad.

In USA and Europe the huge bonuses which are paid to directors are to be compared with corruption, it just has another name, and that is not so bad!!!

[Mike Farmer]

I hear what you're saying Bonusman, and, no, no one thinks it's bad, but it's bad, when the government supports the corruption -- if the companies paid the bonuses, but didn't receive any government favors, I'd say it's their money and their business -- but if the government is taking our money to give to executives who have run the businesses in the ground, then that's bad. thanks.