Balancing Free Market Forces and Regulation

Funny how things have a way of coming back due to necessity. The financial meltdown that has been growing this year finally had a government bailout similar to the many government programs of the Great Depression. The Republicans, the party of less government and less regulation, finally had to admit that the deregulations that are their hallmark finally gave way to destruction due to incompetence, greed, and poor insight into the financial sector.

So just what happened? We can thank Reagan, Bush I, Clinton, and Bush II for the financial fiasco. Deregulation led to sub primed lending. Wall Street acted more like Vegas, and a shortsighted mentality that less regulation is better for all. Well, history has a way of repeating itself. Yes, a balance is now needed between government intervention and free market capitalism. But we must not forget that the sins of the past such as unsafe worker conditions, no banking regulations, lack of Wall Street oversight and no worker protection led to government programs because pure capitalism simply does not work to offset disparities, monopolies, and outright worker exploitation. So now because of greed and lesser rules, our government has become a big market socialist.

This is a sad day. We need to learn from this fiasco. We must have a balance between free market forces and government regulations. We must find this balance. Because too much regulations or pure market capitalism will lead to disaster. Our survival depends on it.

Comments

[mfgrep:]

Well said Mr. Maura. Regulation needs to address a global economy, not just our own. Unregulated trade in the capitalist system means all goods will find slave labor. Slaves have no disposable income......and the "Global Economy" loses the middle class income that supports it. "Free trade" (meaning unregulated) is not so free in the long run.

2008 Sep 22 09:06 AM

[LCACM:]

Good point... We are told that these Companies are too big to fail. 1) Wonder why the government allowed these Companies to get to this Too Big To Fail Status 2) To avoid future bailouts will any laws be enacted that prevent companies from getting to this Dynosaurish size? 3) What about regulation to prevent failures at already existing Dynosaur sized Companies.
To have a healthy economy we should ensure that companies only attain mammalian sizes and not these monstrous Dynosaurs. The problem with the Dynosaurs was that their brains were very small in relation to their bodies. So they could not quickly adapt to change. After all a company has only 1 CEO , 1 CFO etc. If this can be considered the BRAIN of the company, to mantain mammalian proportions and intelligence a company should not be allowed to grow much beyond 10 Billion. One easy way to ensure this would be to require companies to pay at least a third of their earning as dividends.

2008 Sep 22 10:15 AM