I am a libertarian (well, a philosophical anarchist, actually) and I favor some sort of government intervention to attempt to avert a financial disaster. Indeed, I would have favored more regulations to rein in the GSEs before the collapse. There is no contradiction here.
Given that you have moral hazard problems created by government, it is not somehow unlibertarian to advocate regulation to reduce excessive risk-taking by government-backed agencies. Ideally, Fannie and Freddie would never have existed. Since they did exist, the second-best case would have been for them to be purely private entities with no implicit government guarantee. The third-best case would have been for them to be purely public entities with no profit motive. The fourth-best case would have been for them to be mixed private-public entities like they were, but subject to stringent oversight. We were in the fifth-best case in which they had a profit motive, moral hazard, and little oversight.
For similar reasons, I favor a bailout. There is a time-consistency problem. The government would like to commit to never bailing anyone out. If it were able to do this, the need for bailouts might not arise. But it cannot commit; since everyone knows the government will bail big financial firms out, it basically has no choice.
None of this in any way contradicts my view that the government should not intervene in housing markets in the first place, that currency competition should exist, that taxes should be much lower, that there should be no government redistribution of incomes, that public schools should be shut down, that there should be no government provision of health care, that the draft should be abolished, that marriage should be unregulated, that prostitution should be legal, or that 12 year olds should legally be allowed to purchase heroin from vending machines.
I think you may be hanging to tightly to the semantics.
Libertarianism is not being used (in this article or in general discussion) in its moral theory/political theory sense. They are referring to the derived economic policy theories.
Hype removed, it might read: 'End of government intervention as a taboo.'
No, I don't think so. I am an economist; I understand the issue. I'm saying that if you start with a government intervention, there's not anything unlibertarian about advocating a further intervention to make things less bad, provided that you oppose the initial intervention.
For instance, libertarians oppose government-created monopolies. But given a government-created monopoly, it's not unlibertarian to support regulating it. The optimal libertarian policy is obviously abolishing said monopoly. The second-best one is regulating it. The third-best is letting it abuse its power.
I wasn't implying tat you don't understand the issue. Just that I think the article is implying something more shallow then what you seem to have responded to.
Given that you have moral hazard problems created by government, it is not somehow unlibertarian to advocate regulation to reduce excessive risk-taking by government-backed agencies. Ideally, Fannie and Freddie would never have existed. Since they did exist, the second-best case would have been for them to be purely private entities with no implicit government guarantee. The third-best case would have been for them to be purely public entities with no profit motive. The fourth-best case would have been for them to be mixed private-public entities like they were, but subject to stringent oversight. We were in the fifth-best case in which they had a profit motive, moral hazard, and little oversight.
For similar reasons, I favor a bailout. There is a time-consistency problem. The government would like to commit to never bailing anyone out. If it were able to do this, the need for bailouts might not arise. But it cannot commit; since everyone knows the government will bail big financial firms out, it basically has no choice.
None of this in any way contradicts my view that the government should not intervene in housing markets in the first place, that currency competition should exist, that taxes should be much lower, that there should be no government redistribution of incomes, that public schools should be shut down, that there should be no government provision of health care, that the draft should be abolished, that marriage should be unregulated, that prostitution should be legal, or that 12 year olds should legally be allowed to purchase heroin from vending machines.