During this time of economic crisis in America, where so few people hurt so many, it is easy to get caught up in one’s emotions and promote a quick-fix solution. I enjoy watching the news (it gives me a chance to yell at the T.V. screen every now and then) and during the economic downturn I became an even more avid viewer. However, I saw something that really disturbed me on the news a few days ago: President George Bush and Treasury Secretary Paulson, with the support of many other leaders, have decided to go along with a plan to use some of the “bail out” money to partially nationalize our banks—for those who did not know, “nationalize our banks” actually means the government controls them (best known as a socialist market). Upon seeing this news I began to think about the possible repercussions of this action.
Virtually all of the Democrats and even some of the Republicans have claimed that deregulation is the problem; this is just a flat out lie. If I remember correctly the problem was that businesses such as Fannie Mae and Freddie Mac sold bad mortgages to people who, frankly, should not have even been considered for one. The problem did not sound anything like deregulation to me; in fact, it was more of a consequence of Congress having too much influence in business. Someone may ask, “Why did you make this statement?” To them I say, “Because, Congressmen like Barney Frank under the Clinton administration told the businessmen to sell bad mortgages.” Once Congress told them what to do the businesses followed the plan noticing that they could make quick profits; nobody thought about the future consequences and now the public is paying for it (literally). John Stossel, ABC News co-anchor of the show 20/20, put it best when he said (in his article “Central planning is a proven failure”), “The more complex a problem, the more centralized political decision-making is not the answer.” An example of a government controlling more than it could handle is the collapse of Soviet Russia because of the arms race Ronald Reagan engaged in with them. Soviet Russia collapsed because the government controlled the market (a socialist or communist market system) and could not compete with the quick flowing free market of America.
The United States owes its economic success to the free market system. The U.S. is as progressive as it is because of innovation. Innovation comes from competition and one company trying to defeat the other, and this competition can only be possible in a free market system. Even the communist nation of China is breaking away from a socialist market because they realize that to survive they must allow the market to operate freely. The government cannot and should not control everything; when it comes to the market especially I believe in laissez-faire.