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How Free Should a Free Market Be?

2 points by robg 18y ago

known 18y ago
Free Markets make sense when Race To The Bottom is prevented. http://en.wikipedia.org/wiki/Race_to_the_bottom http://en.wikipedia.org/wiki/Race_to_the_bottom
SwellJoe 18y ago
It's always distressing to see people presenting a failure of government as a failure of the market. The government created this crisis, and the government has responded by causing even more problems and costing taxpayers even more money. By insuring lenders against loss from home mortgages for lower income families (and actively encouraging risky lending so that everyone could "own a home", even people who clearly could not afford to own a home)--practices which reached unprecedented levels in 1999 with new legislation pushed through by Clinton and both parties--the federal government practically guaranteed that the sub-prime crisis would happen. Now, the complaint is that the market is too free, and the general public will happily believe it. But, markets require consequences, both positive and negative. Poor business practices should lead to losses, while good business practices should lead to gains. Lending on a massive scale to people who you can be reasonably certain aren't going to pay you back is a business practice that should lead to extinction for the companies participating in it. Governments job is to enforce contracts: make companies liable for lies and fraudulent activity. If, instead, they merely funnel a nearly trillion dollar windfall right from taxpayers pockets into the pockets of those most guilty, it insures more and worse of the same. It breaks the market in ways that simply cannot be undone. America has ceded economic leadership status, and turned over the economy to a handful of white collar criminals. What little hope of recovery our economy had before the bailout is now gone. If there were awareness of the problems amongst people making the decisions, it could be corrected in a couple of generations...but denial rules the day, and so it will only get worse. Not that I'm bitter.

2 points by robg 18y ago

known 18y ago

Free Markets make sense when Race To The Bottom is prevented. http://en.wikipedia.org/wiki/Race_to_the_bottom http://en.wikipedia.org/wiki/Race_to_the_bottom

SwellJoe 18y ago

It's always distressing to see people presenting a failure of government as a failure of the market. The government created this crisis, and the government has responded by causing even more problems and costing taxpayers even more money. By insuring lenders against loss from home mortgages for lower income families (and actively encouraging risky lending so that everyone could "own a home", even people who clearly could not afford to own a home)--practices which reached unprecedented levels in 1999 with new legislation pushed through by Clinton and both parties--the federal government practically guaranteed that the sub-prime crisis would happen. Now, the complaint is that the market is too free, and the general public will happily believe it. But, markets require consequences, both positive and negative. Poor business practices should lead to losses, while good business practices should lead to gains. Lending on a massive scale to people who you can be reasonably certain aren't going to pay you back is a business practice that should lead to extinction for the companies participating in it. Governments job is to enforce contracts: make companies liable for lies and fraudulent activity. If, instead, they merely funnel a nearly trillion dollar windfall right from taxpayers pockets into the pockets of those most guilty, it insures more and worse of the same. It breaks the market in ways that simply cannot be undone. America has ceded economic leadership status, and turned over the economy to a handful of white collar criminals. What little hope of recovery our economy had before the bailout is now gone. If there were awareness of the problems amongst people making the decisions, it could be corrected in a couple of generations...but denial rules the day, and so it will only get worse. Not that I'm bitter.