Is There a Precedent That's Hard to Take Back?

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Obama: Government creating a precedent which is very hard to take back. He says the past rescues of creditors, other than Lehman Brothers, certainly the rescue of Bear Stearns creditors, AIGs in particular. "As long as I live, if the soccer market goes down by 20% ... I'm now going to be thinking that a bailout is coming," he said.

Bryan Caplan of George Mason University and blogger at EconLog talks to EconTalk host Russ Roberts about two books: Eugene Richter's Pictures of the Socialistic Future and F. A. Hayek's The Road to Serfdom. Both books warn against the dangers of socialism. Pictures of a Socialistic Future, published in 1891 is a dystopian novel imagining what life would be like after a socialist revolution. The Road to Serfdom, published in 1944, explores the links between economic freedom and political freedom and the inherent similarities between communism and fascism. Both books look at the German roots of centralized planning and the nature of the people who rise to power when the State is powerful. The conversation includes discussion of the these topics as well as the rule of law and the amount of state control of the economy in Nazi Germany.