Socialism Or Capitalism
In case anyone has missed it, we have just nationalized several financial institutions and are about to do the same with dozens more. That is, we are using taxpayers money to either own or financially support what had been private companies. "Nationalized", "socialized"...we are well down the path in a direction opposite capitalism.
What were the major causal factors? Lots of words have been used...greed being a good one, a broad erosion of our national business morality is an OK description as well. But as the result of political administrations that aggressively furthered "free market economics"...that is a minimum of governmental regulation or oversight in favor of free markets which were purported to be a more efficient system...greed flourished, moral standards in business declined and now we are where we are. Hopefully, we will learn from this expensive lesson.
After a long career as a banker, I can tell you with absolute certainty that regulation won't always prevent financial losses like we are experiencing. But regulation will definitely soften, minimize and contain such losses. The same can result from government oversight. But what's important about oversight by politicians is that it occurs at all. In the case of Freddie and Fannie it was the House of Representatives that was responsible for providing oversight. But when politicians act only with partisan intent, strong regulation would have worked better. Now instead of overseeing Freddie and Fannie, we the taxpayers now own them! And we will own them for a long, long while. Yes, we've socialized two of the largest financial firms in the U.S. More are probably on the way.
|