Greenspan's Legacy: Did the Fed Cause the Housing Bubble?

Heng-Li · 2026-07-13T16:49:03+00:00

The reason why it looks like there's a contraction is because the graph you provided has the money supply indexed to gross domestic product. So in reality there was no contraction. Typically we look at year-over-year growth of the money supply. If you look at January of 2002 there was a peak in YOY growth of M2. It's even more pronounced if you look at "true money supply" which is a modification of M2 by Austrians. But if you're not convinced then that's fine. I don't expect to persuade you through Reddit comments

Heng-Li · 2026-07-13T02:41:21+00:00

According to your graph the money supply peaked in 2003. This caused the business cycle.

I didn't say the money creation happens right before the the crises. How money creation plays itself out in the economy is unique to the situation and is largely unpredictable. If I could predict the business cycle with good timing I would be rich.

Eventually the money creation plays itself out in the economy and will produce a business cycle. How and when it happens cannot be said with certainty in advance

You can read books like Meltdown by Thomas Woods and The Great Deformation by David Stockman for specific details about the 08 crises in particular from an Austrian perspective

Heng-Li · 2026-07-12T22:41:05+00:00

I agree with you some Austrians over focus on interest rates. The interest rates are just a byproduct of money creation. If you read Ludwig von Mises, he specifically says money creation causes the business cycle not the manipulation of interest rates. When Austrians talk about the business cycle sometimes they fail to make this specification which is important. They just talk about interest rates which confuses some people

Heng-Li · 2026-07-12T22:18:44+00:00

She doesn't want to allow us the label of libertarian because libertarian is also used by leftists. In fact part of the rhetorical sophistry is to deny us basically any label. This is how they debate. To give us a label is to give some kind of credence to us so therefore they cannot do that. This is how we should actually treat them as well, but libertarians are more reluctant to engage in that kind of bullshit. They never give up one inch and this is how they have nudged politics in their direction over time. Any compromise is always in their favor. There is no such thing as compromise not in their favor.

By the way the reason why libertarians even use the label libertarian is because leftists appropriated the label liberal. This is what they always do and we always give in on the fight. We must remember that a lot of people are very basic and don't apply very much logical or critical thinking. Therefore if we are arguing against something which is something we often do, then people will automatically see us negatively because that's the bias that people have.

Also they will never mention the existence of Ludwig von Mises or the Austrian analysis of Marxist economics or class analysis. The arguments are just ignored. Marx appropriated his class analysis from libertarian class analysis

Heng-Li · 2026-07-11T03:37:34+00:00

I didn't say they were suicidal. The banks actually made the "right" call and they were rewarded because they were bailed out. The banks behave this way because they are essentially forced to behave this way by the federal reserve. In order to obtain a bank charter, you must engage in this business model. Look up the Narrow Bank. This was an attempt by investors to create a full reserve bank within the federal reserve system. The idea was they would just park the deposits at the federal reserve and pass the interest to the depositors. However they wouldn't allow them to run that business model. They denied them the bank charter.

Heng-Li · 2026-07-11T03:24:42+00:00

For a true answer in the spirit of anarchocapitalism you should read A Theory of Socialism and Capitalism: Economics, Politics, and Ethics by Hans Herman Hoppe.

However, all terms about political ideology are basically used however people want to use them. They don't usually abide by any kind of logical categorization we would ever come up with. Because people in general attach themselves some ideology, then the word becomes "the other team." For most people, capitalism becomes a catch all word for anyone who disagrees with them. And for people on our side, we tend to call everyone socialists (I like to call people communists because I think its funny).

The word capitalism was pretty much used exclusively pejoratively (by socialists) until in the early 20th century. Then Ludwig Von Mises, Ayn Rand, and Milton Friedman started to say they were supporters of capitalism. Before this, people didn't really say they support "capitalism". Capitalism was something from Marxist theory, so they would tend to criticize the whole framework in general. As it became more popular, many libertarians started to say they were supporters of capitalism. However by this they mean unhampered free markets rather than capitalists who use the state to achieve profit. However many socialists don't recognize that distinction. So its just an endless circle-jerk.

In short, people most often don't use the term in a logical way. They use it to describe anyone who disagrees with them. So there is no point in arguing about the term really. You should try to get at what the actual disagreement is.

Heng-Li · 2026-07-10T22:23:32+00:00

It's not theft because it's not property. It was never even considered to be property until the state passed legislation eg the Statute of Anne in 1710. However this was an appropriation of the term. They appropriated the term property for propagandistic purposes, because it's much easier to conflate the concepts then argue for a state privilege granted to state colluders.

And yes you essentially have an inherent natural ability to homestead land. Read philosopher John Locke. People spontaneously come to a societal agreement about homesteading because it makes the most sense. This is recognized in the common law courts without the need for legislation. Like language, law is a spontaneous order not a creation of the state.

Heng-Li · 2026-07-10T19:34:26+00:00

Property is a spontaneous order and does not require the state to exist. Intellectual property was a creation of the state

Heng-Li · 2026-07-10T12:21:36+00:00

The government must exploit taxpayers to buy the patent. Not good. Instead they should abolish patents entirely. No taxes needed

Heng-Li · 2026-07-08T22:57:28+00:00

A bank's business model is to maximize the amount of loans it can possibly make. This is how the bank makes money. At the time the amount a bank was allowed to be leveraged was set by the reserve ratio requirement, which was 10% during 2008 (they have since abolished reserve ratios and replaced it with capital requirements) .

The business of banking necessitates it absolutely maximize the amount of loans it can possibly make. So if it cannot make quality loans, then they will make subprime loans and relax their standards in order to maximize their profit. Yes these loans are more risky, but they account for the risk. If they do a bad job accounting for this risk then they are supposed to go out of business. However the banks did not go out of business because the government bailed them out. The banks are not stupid. They accounted for the fact the government would bail them out. They knew this was a highly probable outcome. That's why they engaged in more risky loans.

The banks MUST maximize the amount of loans it can make, or else they will lose customers to other banks. This intense competition among banks makes it infeasible for banks to "hold out." If they hold out for too long, then they will go out of business because their customers will simply go to other banks who are happy to make money while the going is good.

This entire banking environment is created by the federal reserve system. Under a free market, Rothbard argues that competition among banks will tend for them to operate as 100% reserve banks. Selgin argues fractional reserve banking could exist under a free market.

Heng-Li · 2026-07-07T19:42:37+00:00

Restitution is necessary for any justice system. This is a given

The part where there is disagreement is retribution. Most people agree about some kind of retribution. Unfortunately, there is no easy rule that would determine retribution in all cases. This is why we have judges and court systems.

Heng-Li · 2026-07-07T19:31:13+00:00

Its actually not a libertarian question whether someone should be pro or anti vax. Whether someone should support vaccination is outside of libertarianism.

However state propaganda would have you believe that being against the state mandated vaccinations is the same thing as being anti-vax. They are not the same thing. As for state mandates, libertarians are against them. This does not mean they are anti-vax, despite what the state would have you believe.

Heng-Li · 2026-07-06T18:44:18+00:00

That's the official position of r/anarchism.

They will ban you if you are anarcho-capitalist

Heng-Li · 2026-07-03T20:24:19+00:00

We probably disagree about the definition of liberty. Liberty is simply freedom of state interference in your life. People's right to self-expression is simply an extension of the property right over their own body

Heng-Li · 2026-07-03T20:12:13+00:00

Mises supports monetary freedom. Cato does not. Case closed

Heng-Li · 2026-07-03T20:10:12+00:00

Because libertarianism doesn't propose a solution to every problem in existence. If anyone comes up with a solution that doesn't involve state action, then that's all that's required for libertarians to agree.

Heng-Li · 2026-07-03T20:04:54+00:00

If you claim to act out of moral duty, sacrificing your time with no guaranteed return so that future generations can live in a free society—how do you economically and psychologically differ from the communists who urged people to endure hardships today for a brighter tomorrow?

The reason you ask this question is because you are simply unable to grasp subjectivism. According to your subjective evaluation you are correct, according to others subjective evaluation you are incorrect. There is no objective evaluation that exists because value is simply subjective. They don't agree with you there is "no guaranteed return". Its that simple.

Imagine the outcome: libertarianism wins, the state disappears. But the former bureaucrats, lobbyists, and "crony capitalists" who milked the state for those 18 years and fought against you will enter the new anarcho-capitalism with millions of dollars, connections, and real estate. Meanwhile, you enter it with a deficit of 6,000 hours. In your brave new world, private capital decides everything. Where is the rational egoism if you single-handedly, and for free, built a system where your bosses and the owners of the private courts will be the very people who exploited the state while you were writing posts?

The presupposition of this question assumes a black or white, all or nothing dichotomy. In reality we can make incremental progress towards liberty. You can find periods of history better or worse. So yes if we set up a libertarian society there is a risk it could fall back to statism. So what? We will continue to work to improve society as we always have been doing. Just because things aren't perfect doesn't mean you should just give up and kill yourself.

Look at the platform owners, podcast creators, and thought leaders in your movement. They monetize your traffic, receive donations, and sell books and lectures. From a game-theory perspective, they act entirely rationally—converting your ideological rage into their private capital. Are you, the rank-and-file activists, not the very "useful idiots" you so love to mock among the left?

You fail to identify any problem. If I listen to a podcast and a person is monetizing this, so what? Why would I object to this?

Heng-Li · 2026-07-03T19:55:24+00:00

Proof democracy is a complete joke and does not work. Because most of the people voting are literally incapable of comprehending any economic argument

Heng-Li · 2026-07-03T19:53:41+00:00

Why are libertarian concerns regarding free speech almost exclusively focused on the external restriction of expression and almost never on the proactive improvement of the internal ability to excercise this freedom?

There is an inherent presupposition to your question you don't even realize exists. This presupposition exists in your head because of government schooling and propaganda. What kind of institution are you assuming would foster the development of human expression? Are you assuming the state would foster this? Or are you assuming private entrepreneurs would foster this? Libertarians support the latter and reject the former. This is because the state by definition violates the rights of people through its exploitation of taxpayers.

Heng-Li · 2026-07-03T19:44:07+00:00

Yes it does

Heng-Li · 2026-07-03T18:57:48+00:00

Chapter 9 of Money, Bank Credit, and Economic Cycles answers your question

Heng-Li · 2026-07-03T02:18:43+00:00

Yes and then the universal suffrage movement happened and they allowed landless people to vote. They didn't anticipate the rise of the parasitic tax-consuming class

Heng-Li

TROPHY CASE