The proof is their awesome deafness to the grand masters of human nature
Libertarians talk about reason and logic but are amateurs at logical argumentation
Libertarians know nothing about the wise application of power
coming from wisdom literature
coming from game theory
coming from new forms of logic (such as contract bridge bidding conventions)
The example here is Alan Greenspan and his management of the Federal Reserve as derivatives grew larger and larger as unregulated financial instruments. Here is a timeline of events over the last 37 years that has led to the present financial and banking quagmire. Note the insignificant predictive power of Alan Greenspan and his consistent siding with the bringers-of-disaster rather than with common sense, rule of law, responsibility and simple learning from the examples of failure that provided ample warning along the way.
Derivatives Crisis TIMELINE
Late 1987 -- Plunge Protection Team formed
July 5, 1998 Salomon Brothers arbitrage unit announced as disbanding
September 7, 2008 Fannie Mae and Freddie Mac placed in conservatorship by Federal Housing Finance Agency
May 6, 2010 a “flash crash” of extreme volatility occurs and is blamed on high frequency trading. Congress is still investigating as of September, 2010.
As this crisis developed, libertarians were easily co-opted, manipulated, manipulated, and herded like cattle
“Fraud is impossible because securities markets are “efficient” and act as if they were guided by an “invisible hand.” Markets cannot be efficient if there is accounting control fraud, so we know (on the basis of circular reasoning) that securities fraud cannot exist. Indeed, when Easterbrook and Fischel try to explain why the securities markets automatically exclude frauds their faith-based logic becomes even more humorous. They claim that honest securities issuers send one or more of three “signals” of honesty to guide investors to purchase their securities – and that only honest firms can send any of these three signals.
1. Hire a top tier audit firm
2. Have their CEO own a substantial amount of stock in the company
3. Cause their firm to have extreme leverage “
- this quote from the link above exactly matches Alan Greenspan's 1998 opposition to Brooksley Born's contention that all derivatives should be traded on listed exchanges (see my timeline above in this blog post). Greenspan certainly knew of the frauds of the early 90s listed in my timeline. Certainly.