In this NY Times article the pros and cons of 'market place forces' are considered.
Peter S. Goodman | The Free Market: A False Idol After All? 'The way they justify it is that you've got to protect the stupid people who can't read a contract,' Mr. Henderson said. 'But they're treating everyone as stupid.'What gets me is that there were lots of loans sold. These loans were paper transactions. The assets and/or debt were not valued as they should have been. Big time corporate folks didn't do their homework.
But in Washington, and under the roofs of many homes now worth less than a year ago, there appears to be a shift in the nation's often-ambivalent attitude about regulation.
Back in the boom, banks made loans to homeowners who did not have to prove their ability to pay, then quickly sold the loans to other companies. By the time it emerged that a lot of homeowners could not pay, these loans had been pooled with other loans and chopped into strange new paper assets that were sold to unsuspecting buyers around the globe. The subsequent reckoning has forced major banks to write off vast sums of money.
"Here you had all these people who were supposed to be sophisticated investors, and it turns out they were buying billions of dollars worth of debt where they didn't even understand what they owned," said Dean Baker, co-director of the liberal Center for Economic and Policy Research. "There is going to be a willingness to re-regulate financial markets."
Liberal critics have long asserted that dogmatic devotion to market forces has skewed American society toward those of greatest means. More wealth is being concentrated in fewer hands, with rich people capturing the best housing, private education and health care services, and, as the argument goes, only crumbs left for everyone else.
Here is where we as a nation cave and do the 'corporate welfare' things. They do a 'bail-out for the bankers.' They do deals that help the heavy hitters.
If the US Gov had 'dogmatic devotion' to the market forces then there would not be any bailout options for the bankers and corporate entities.
The willingness should not be to re-regulate. The willingness should be to let some of them tank. Tough love!
More wealth is being concentrated in few hands, with rich people, because government comes to the rescue for the rich, the connected, the corporations, the elite.
The market needs less supervision than the politicians and their over-reaching promises.
When untethered market forces lead to bad things, and the governmental wonks try to fix them -- then the market is not 'untethered.' When the wonks try to make the bad things okay, they aid their buddies with corporate welfare.
You can't run an economy as complicated as ours today with only ideology and do nice things for your friends. Generally, those with influence hate those who are driven by ideology alone. Those with influence and special privileges who crave more of the same are the quickest to complicate situations to prove their points and justify their special handouts.
More to think about.