Listen to Those Who Saw It Coming
Jan 11, 2012 at 5:14 PM
"Air Force veteran Nellie Cooper thought she was following good advice when she refinanced her home's mortgage with an adjustable-rate loan," writes Gidget Fuentes of armytimes.com. Turns out this was not the case. Rather, following many years of illusionary expansion and soaring prices in the housing market, people like Cooper faced "financial ruin" when it all came crashing down. After an environment was created by the government in which anybody could buy a house -- whether they could afford it notwithstanding -- the situation quickly changed. The bubble burst and the price many individuals paid went beyond a dollar value.
Unfortunately, we are still stuck in this rut as the government has not decreased its active role in our lives and in the market. However, we can look back before the housing bubble popped and observe something very impressive: There were many people who actually saw it coming. Not surprisingly, they all have something in common: they're a part of the pro-liberty movement.
I want to preface this part of the post with an obvious acknowledgement that pro-liberty, limited government (perhaps Austrian) economists and leaders are not gods. They are not prophets and certainly are not perfect. However, their strong understanding of how markets work and how governments distort those markets contribute to their foresight into economic crises. That's why in a world where nobody seemed to see the problems of government intervention in the housing market, they did.
Robert Blumen saw it coming, Sean Corrigan saw it coming, Congressman Ron Paul saw it coming, Doug French saw it coming, and Peter Schiff sure as hell saw it coming. They and other Austrian economists all knew it was coming because they could identify the causes of the problem as they were taking place. That's a pretty good skill to have. Anybody can reasonably reflect on a situation and identify the causes in retrospect but only a few can see the problems as they are unfolding.
Yet these folks (YAL included) are still fighting an uphill battle as if they did not, at least somewhat, validate their views by correctly predicting a specific economic crisis. It is baffling to me. Why are these people and their views being pushed aside? How come these people are not being valued and listened to? I'm sure it has to do with the fact that there are many in Washington who simply are unwilling to let go of their power. However, they ought to not be so stubborn if they truly cared about their country. While hindsight may be 20/20, foresight is priceless and is something America's leadership needs more of. The liberty movement can provide that foresight.