@mrcongojack:
You support the idea of regulation. I disagree...part of the reason why we're in this mess in the first place is that, we told banks to make unnecessary and "risky" loans to buyers, that made housing affordable.
That created a credit bubble...in other words, home-buyers can afford these very expensive homes. Expect to buy a house, and within a few months, that house will increase in value. What happens for a lot of people, is that they "flip" these houses, and re-sell them in the market, to pocket a few profit for themselves. Why? because house price kept going up, up, up, until it created what experts call, "house bubble", or inflation in house prices.
The fact that government told private institutions, in this case, banks, what to do, should have been utterly avoided. By the same token, home-buyers were involved in all this capitalist greed....we learned how to "flip" houses like geniuses, in fact there are TV programs (on TLC) that instructs us how to do just that. Real Estate became a part-time job for most middle class people.
Personally, I admit my parents got involved in this once lucrative business....although they've never once sold a home. They simply purchased the home(s) to accumulate equity, in hopes to one day re-sell on the market...although that never materialized.
Let's minimize government regulation, let Wall Street on its own, and we should never have to bail out failed institutions. This, at least, you agree with me....let them all fail. That's capitalism. That then eliminates some of the competition, and other companies will survive, probably for the better.
The reason why so many banks started collapsing, and just recently, Washington Mutual fell (the largest bank failure in American History), and was bought by JP Morgan Chase.....the reason for these bank collapses is that most of them all heavily invested in the mortgage business. Now that the availability of home-buyers shrunk, these banks' steady flow of return on their investments suddenly stopped.....hence this chaos.
For the government to bail out these failed institutions would be the equivalent of the government becoming a huge corporation, and as you've said in another thread, would be a step closer to communism, which is true.
Why not let the market and companies duke it all out, as naturally they would. Some companies are already buying out their competitors (i.e. JP Morgan Chase with WaMu), and although this is a "monopoly", that's how it ought to work.
It's either that, or allow the Federal Government to become the monopoly, and when you mix politics and money, it means corruption. I'd prefer the former.
The only time I support regulation is when the government acts to prevent "unfair" business practices. We need to regulate cases when corruption in companies are happening.....Teddy Roosevelt became famous for "trust busting"....he allowed businesses to flourish while they can, but when they got too big and corruption occured, he wasn't afraid to employ his "big stick" (lol....actually, he employed this method in foreign policy matters).
But it isn't the job of the government to impose their will on private companies on business matters...as Senator Harry Reid is now constantly babbling about when accusing Senator McCain for "injecting politics" into this supposed bailout agreement, so too, should the government not inject politics into Wall Street.
On another note, here's an interesting article, and it's so true..
source:
IBDeditorials
