Tom Woods - Child Labor

Professor Woods explains the dynamics of child labor. http://www.LibertyPen.com

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[batmanthe]

I'm tempted to downvote this due to the dumb overdone effects.. But I can't downvote Tom Woods..

[capemh]

Mostly they were caught up in the panic caused by the defaults in the private label MBS's which caused falling house prices and unemployment caused defaults, not because of the government insisting on the issuing of sub-prime mortgages. It was the unregulated private securitizers who were buying up the worst mortgages (they were not required to buy any) and the private mortgage writers, who got paid on volume and not quality, who caused the crisis.

[capemh]

Whereas the GSEs guaranteed the performance of their MBS, private securitizers generally did not, and might only retain a thin slice of risk. Often, banks would offload this risk to insurance companies or other counterparties through credit default swaps, making their actual risk exposures extremely difficult for investors and creditors to discern.

[capemh]

Freddie and Fannie also bought some Alt-A loans (these are loans to borrowers with good credit scores, but which are not as fully documented with respect to borrower income and assets as are prime loans) for their portfolios. They have lost money on these also. Despite their losses, their loss rate is less than one-third the loss rate of the 67 mortgage banks with assets of more than $10 bn

[capemh]

The charters of the GSEs preclude them from securitizing subprime loans. Thus, they were unable to support subprime lending by any commitment to funding or securitizing them. They were followers, not leaders. When Fannie and Freddie did buy was some higher-rated pieces of subprime MBSs created by Wall Street. The ratings on these securities fell when the subprime loans began to default in large numbers..

[capemh]

For those of you who think that Freddie and Fannie were at fault for the banking crisis either a: you don't understand what actually happened or are lying. See the next posts...

[fzqlcs]

@capemh Removing all work regulations and licensing would lead to the freedom for everyone to act in their own self-interest, but it would harm politicians greatly in their quest to buy votes.

[capemh]

Wouldn't "child-labor laws" decrease the available labor in the market thereby increasing the income of the remaining workers? Isn't that the law of supply and demand?

Isn't it in the interest of every employer to have a better educated and physically mature employee than an illiterate child?

So, the Libertarian dogma would prefer government not regulate child labor and eliminate prohibitions on things like prostitution. See if you can guess what that would lead to.

[ElJefer]

Child labor was already at a decline when the child labor laws were passed. The government is useless at most things.

[david52875]

@iggerdanus Raising taxes decreases GDP. Tax revenue is directly proportional to GDP, always about 1/5th. So if your always taking one eighth of the pie, and the pie shrinks, you get less pie.