The "Free Market" ?

In America there is always something. In the late 80’s there were similar economic strife’s. There was controversy about Farm Credit, and also the Chrysler loan. A lot of folks were up in arms then too. Presidents past, and probably future, will have to deal with this economic pattern. As with Chrysler, there have already been loans distributed to corporations battling in this modern depression. In article one it states that “the mortgage crisis has forced the government to once again shove ideology aside and get into the bailout business.” The last major bailout in America was the September 11^th airlines issues. The government loaned and subsidized over $15 billion.

The underlying theme here is that the big corporations in America cannot fail, as long as the government steps in to save them. Sometimes it works out just fine, as with Chrysler. In the aftermath of the comparatively small bailout the government never ended up giving Chrysler the proposed $1.5 billion, due to stock warrants when the loan was guaranteed. Everything straightened out and there was not need for actual government intervention. The question still remains: Does the government need to intervene?

Article two was more or less the proposal outline and the arguments that fosters in Washington. One side calls for fast action of the proposed $700 billion plan, the other offers an alternative. Just when it seemed there was a bipartisan standing, and the agreement had been born, tensions rose among new players, including the presidential candidates Barak Obama and John McCain. It was too much for one Washington. Things were pretty much hung out to dry. Then, the compromise: It called for the Treasury Dept. to buy, and then later re-sell the mortgages, bonds, and other assets to “try to put a floor under prices and restore market confidence.” The compromise also called for additional oversight before releasing all the funds; they would be given just $250 billion to start and $100 billion future installments. This plan would also limit the pay to the executives of the companies assisted in the plan. The plan seems pretty good, right? While it might be a good plan, and the outcome might be to the tax payer’s benefit, it still means hardship in the economy and an all-time high in National Debt.

I agree this plan, as far as I understand it, could help the corporations out, but I’m not sure I can agree with government intervention at such a price to the nation. We already have something like $9.5 trillion in National Debt. I feel that this could and will be solved just as fast and with less economic complications if we follow the Laissez-Faire market structure. The economic problems of every business in America are not solved by the government, and they shouldn’t start now. I don’t think an economy where the government own large stock, and other asset quantities would be a good one. I feel that the market will bounce back up if the government simply institutes some regulations in concerning fair lending. There is no reason to give our cards to one player. We will not make out in the end.

I think the market can best be compared to a small child that has been swimming in the baby pool too long to keep its head up once it gets into deep water! The government in this case doesn’t want the child to drown, so it pulls them out of the water and then wants to give them the $700 billion, or in other words send them on their way in the baby pool again. What it should do instead is give the child water wings, equating to regulations and lending standards, in the first place that would prevent deep waters, or financial crisis, from engulfing them. If we hadn’t introduced lax lending policies in the first place and instead place the water wings on the child would be swimming right now not drowning. It is a principle most parents follow, that I have heard many times: “It is easier to prepare and prevent than to repair and regret.” What we need to do now is get the message across to America, namely to those elected leaders who can fight for these regulations and standards to be introduced. The message is clear: we need change, we need ___________. You decide.