Quoting from Wikipedia’s article on Lebanon:
“Due to its tightly regulated financial system, Lebanese banks have largely avoided the financial crisis of 2007–2010. In 2009, despite a global recession, Lebanon enjoyed 9% economic growth and hosted the largest number of tourists in its history.”
What is the Austrian’s answer to this assertion?
What does “largely avoided” mean?
One could assert that American banks largely avoided the financial crisis insofar as they weren’t in the financially messed up condition that Wall Street banks were.
Also, you’re presumably asking for an economic answer, however, the answer is most likely political.
“Lebanon enjoyed 9% economic growth and hosted the largest number of tourists in its history.”
Maybe the Wall Streeters spent their bonuses by touring Lebannon.
Also, you can’t quantify regulations. Or, how would you quantify it? Do you count the number of individual regulation? The number of pages they compose of?
Anyway, perhaps what is more important is not the amount of regulation but, instead, what is regulated and how the regulations are enforced.
The BBC article lays it all out.
There is one guy in charge there who is ultra conservative and got the housing crisis right.
The thing is, predicting the collapse of the housing market didn’t require Austrian Economics, praxeology, or anything else.
“So what are you trying to sell me?”
"Mortgage backed securities.’
“Which means?”
“People borrowed money to buy houses and they will repay you instead of me.”
“And how large a down payment did they make? Zero? What evidence did they provide of their ability to repay? None? You mean they don’t even have a job? I would never lend a Lebanese money under such conditions. Why should I lend it to a faraway American?”
“Don’t worry, the US govt backed Freddie and Fannie have guarenteed the loans.”
“Oh? But I see here on the first page in large black letters that Feddie and Freddie are NOT backed by the govt.”
“Don’t worry about that. It’s just for show.”
“My lawyers don’t understand that concept, just for show.”