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Source link: http://archive.mises.org/9059/the-billionaires-broken-windows/

The Billionaire’s Broken-Windows

December 5, 2008 by

Want to restore prosperity? Have the government crush foreclosed houses and build government exercise and indoctrination centers in their place, says Mark Cuban. BTW, this is no reason, no matter how tempted one might be, to persecute him for the non-crime of “insider trading.”


Michael December 5, 2008 at 8:18 pm

Naively thought-out idea Mr. Cuban. Why does a foreclosure warrant the physical destruction of property? How about said property be sold to buyers who can responsibly take on the debt obligations? I’m confident that Cuban is ignorant of the broken window fallacy.

Stick to your entrepreneurial interests and complaining to NBA referees for bad calls.

A better idea, Mr. Cuban, would be lobbying for the abolishment of the Federal Reserve System (and any legislation that would explicitly prohibit any central banking schema going forward).

Brent December 5, 2008 at 8:37 pm

Perhaps he should be advocating for less government, in light of his recent problems with the feds.

Bruce Koerber December 5, 2008 at 9:30 pm

So the ‘Cuban’ name is indicative of his ideological similarity with Fidel Castro!

And the ‘Mark Cuban’ name must be the instruction uttered by the clerk when the visitors to the exercise and indoctrination centers are branded.

The ego-driven interventionists are of all kinds, some more perverse than others, but they have in common fanciful ideas on how to make the world look like the bizarre world in their minds.

These deviants are made impotent by classical liberalism and they are left to themselves to imagine themselves as Napolean or Elvis!

jeffrey December 5, 2008 at 10:02 pm

Very disappointing indeed!

Patrick December 5, 2008 at 10:40 pm

Cuban you meathead! What about the owner of the foreclosed houses in question?

Do you propose that the government steal them in order to demolish them?

J Cortez December 5, 2008 at 11:16 pm

You have to chuckle at his ignorance.

What’s funny about a quasi-capitalist/mixed economy like the one in the US, is that there is still a market free enough to create billionaires– and said billionaires don’t have to understand the basics of economics or even reality to become super-rich.

These same billionaires sometimes have a such totally distorted view of what government is and how capitalism works that they champion forms of socialism, merchantilism or fascism without a second thought.

That’s how you have someone like Cuban or Buffet or Bill Gates or whoever, philosophically reject what made them as wealthy as they are.

If Cuban’s serious about increasing employment, maybe he should use some of his $2 billion in net worth to fund it, instead of having the government stealing/distributing the cost among everybody, the majority of whom are not billionaires.

ktibuk December 6, 2008 at 5:47 am

Actually if left to the free market most of the excess houses would be destroyed.

The problem was all the scarce resources that was needed somewhere else went into housing and this malinvestment must be liquidated.

The problem is liquidation of houses is a painful process because one would lose a lot of value by tearing down a house.

If anyone thinks this situation would give people affordable housing doesn’t really understand the business cycle. Bust must come after the boom and bust means liquidation.

Of course government has to have nothing to do with this.

Laura Louzader December 6, 2008 at 6:56 am

It is indicative of the failure of government policy, that in an era of still-unaffordable housing and vast numbers of homeless people, that we could even think of demolishing foreclosed homes in an effort to support housing prices at levels still unaffordable as measured by incomes, and rents for comparable properties.

Here in Chicago, we have thousands of condo units standing vacant, and developer’s foreclosures, while the minimum wage worker has been priced out of even the cheapest rentals, and thousands of moderate-income would-be homebuyers remain sidelined.

Let the law of supply and demand mediate the situation, and these empty homes will find moderate income buyers, whose vacated rental units might then be available to lower-wage workers. Let the Invisible Hand solve the “problem” of excess inventory AND the shortage of affordable housing.

Then let’s get to work on the REAL problem, which is government intervention in the housing market going clear back to the 30s, and government goosing of the credit markets. These interventions are what created this debacle, and we need to unwind every single government housing program created to enable people to buy homes they otherwise couldn’t afford, and then we need to dismantle the Federal Reserve, that great bubble creator. These programs have done nothing but skew the housing market northwards, while favoring suburban sprawl development and gutting urban neighborhoods.

fundamentalist December 6, 2008 at 8:32 am

Let’s apply Cuban’s idea to reducing unemployment. How about taking a few thousand of the unemployed out and shooting them?

Pat December 6, 2008 at 9:05 am

“Mark, welcome to the club” is what Buffett would be telling Mr. Cuban. Obviously, they wouldn’t mind more government intervention. They stand to gain as much or even more than the relatively less wealthy denizens of this planet stand to lose. And the worst part is, they think they are doing the world a favor (Note: I would be more than happy if they stick to running their business instead of running to Washington and playing the lobby game. In fact, this whole lobby game has to come to an end. And so has this interventionist government).

JFPerez December 6, 2008 at 10:15 am

Bravo Fundamentalist! Excellent idea!

However, we have to be careful what we call the new government entity “entrusted” to carry out this important mission. OGPU, NKVD, SS: These sinister acronyms will only menace the public. In the spirit of this age of doublespeak, how about we call it something antiseptic like “The Commission for Labor Stabilization” (Stability–Good!) or ” The Fair Wage Administration.”

We’ve also got to get our major propaganda organs (TV and print news) to paint these unemployed types as the greedy “industrial saboteurs” they are: lowering wages for all of us “honest” workers. It’s time for decisive action Stand ‘em up against the wall! Liquidate these kulaks!

However, in the spirit of the age, our budding Iagoda/Yezhov will have to be able to go on TV and tell the American people how these policies are really working, how they’re really making a difference. Somebody jovial and avuncular, yet cold-blooded enough to wield the machete. A bumbling fool of the likes of Paulson just won’t do. Somebody photogenic, with the gift of gab. Any suggestions?

Chris Henry December 6, 2008 at 10:48 am

Is there any chance Cuban was being sarcastic in this remark?

Ghost12 December 6, 2008 at 11:12 am

So I guess along with much of the university system, we must add billionaires to the list of aspiring socialists. It truly boggles the mind. Or is it that most billionaires wouldn’t even exist without the aid of government granted monopolies and subsidies?

C. Evans December 6, 2008 at 11:52 am

“Is there any chance Cuban was being sarcastic in this remark?”

After reading the entire post, I have to answer no. He really does believe that the government creates jobs.

Regarding rich socialists, I am becoming ever more convinced that Chodorov was correct with this theory that socialists are born and not made. In one essay he writes,

“Environment or education has little to do with the making of a socialist. He may come from a wealthy home, where all his training should incline him toward capitalism, or he may come from the slums. In point of fact, many of the leaders among the socialists, those who do most to advance the cause, are inheritors of great fortunes accumulated under capitalism…These few were born with an innate compulsion to socialism.”

Robert Vann December 6, 2008 at 12:30 pm

The posting on Mark Cuban’s blog offers greater insight into an insidious fact regarding use of private vs. public wealth during hard times: having noted that consumers are too shocked to act their function as consumers, and that entrepreneurs and other investors are holding on to capital for bargain-bin deals, Cuban predicates his government spending suggestion with, “the only liquid investor willing to put non current assets on their balance sheet is the government.”

The lunacy that the government is a liquid investor somehow divorced from the origins of its capital as tax revenue notwithstanding, are major investors genuinely looking to government to handle the toxic assets so nobody else has to get dirty? It seems that — while the toxicity of such assets is ultimately diluted across a larger number of victims — the toxicity is nevertheless forced upon a large number of people who might have otherwise been relatively innocent in its cause. This is an untenable position, the correlation to distribution of wealth is this distribution of poverty in the form of taxation.

On the other hand, Cuban has helped sponsor BailoutSleuth and has offered insight into inaugural alternatives that expose how corrupt a vision for America the federal government often offers. You win some and you lose some.

David Carlson December 6, 2008 at 3:01 pm

I would like to say a couple things -

1) America is truly the land of opportunity. If someone like Mark Cuban can become as wealthy as he is, yet still say something so unbelieveably…dumb, anyone can thrive in America.

2) It scares me that someone like Mark Cuban is not in support of limited government.


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