The Issues, No. 34 - The Economy

I think in the beginning of our country, our economy was basically to be one in which anyone could participate and that competition and the economic forces of supply and demand would be its regulators. Government's role was to be one of minimal interference and to assist the economy to grow and prosper by ensuring these basic principles were not violated.

Over time government has increased its involvement in our economy through more and more regulation to the point where government today is pretty much the controlling influence. A great deal of this regulation is/was necessary to avoid another stock market crash and depression. The problems in the mortgage and credit industries are bad enough. But recent government takeovers/bailouts of Fannie May, Freddie Mac and AIG are scary. The government shouldn't have to take this kind of action in a responsible economy. It did, this time, particularly because of the far reaching effects on all Americans the failure of these institutions would have. Hopefully it works and hopefully the stock market won't crash and we won't have another depression.

What all of this demonstrates is that the economy, if left to its own devices, does not act responsibly, and greed and unreasonable, irresponsible risk takes over until the economy crumbles. What this means to me is that the government needs to learn again from these recent events and regulate the economy to prevent this type of failure in the future. I don't like it but I believe human nature is at play here and that even in our democracy, irresponsible human nature needs to be tempered by government regulation.