The End of Libertarianism (NOT)

This Slate article The End of Libertarianism by Jacob Weisberg is completely wrong. 

A source of mild entertainment amid the financial carnage has been watching libertarians scurrying to explain how the global financial crisis is the result of too much government intervention rather than too little. One line of argument casts as villain the Community Reinvestment Act, which prevents banks from "redlining" minority neighborhoods as not creditworthy. Another theory blames Fannie Mae and Freddie Mac for causing the trouble by subsidizing and securitizing mortgages with an implicit government guarantee. An alternative thesis is that past bailouts encouraged investors to behave recklessly in anticipation of a taxpayer rescue.

The author claims that libertarians are somehow surprised and now "scurrying to explain" this financial mess. The reality is that libertarians, and more specifically those that subscribe to the Austrian School of Economics, have been predicting this financial mess for years. For example, in 2003, Ron Paul predicted the Fannie Mae and Freddie Mac disaster. Followers of financial markets and  students of Austrian Economics such as Mike Shedlock, Bill Fleckenstein, Peter Schiff, have written for years about how easy credit from the Federal Reserve was the leading cause of the housing bubble. In fact, it would seem that libertarians were the only ones talking about this when housing prices were rising 20% each year while everybody else was seemingly applauding this false wealth creation. Of course, followers of Austrian economics naturally understood that bubbles always result in busts and the the bigger the bubble, the bigger the bust. It's sad that Weisberg hasn't done his homework. Fortunately, investors that understand these principles have been able to protect their wealth.

Weisberg is right on one point. We will likely see a new era of socialism, perhaps a second New Deal under the next administration. But socialism always benefits those that are most powerful and most connected to government, not the average masses it pretends to help. 

[Updated: Removed section about libertarians and students of Austrian Economics knowing how to protect their wealth in the future. Joachim corrected me when he said "Rather, we should predict that government is likely going to distort markets to an extent that not just slows down everybody's ability to create (and preserve) wealth.  It will also attempt to redistribute big time, and whether you can or cannot escape the looting has nothing to do with your political conviction or intellectual rigor."]