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Magic of the Market

The recent intervention of the Fed in banking and turmoil over the subprime market downturn should cause one to ponder the benefits or negative effects of Government actions in reaction to those events. If you don’t believe in Capitalism, there is only one answer–let the Government run everything and make every decision. It could determine who can buy what, when and how. That could eliminate any chance of a “mistake” or being duped into a bad loan for that luxury house that was truly beyond your means in the first place.

If, however, you buy into the efficacy of the free market place, then you must accept that mistakes will happen and the failures will occur. When they do, is it the place of Government to bail out the investors and consumers from those mistakes? Many speak out now for various Government programs or one sort or another to remedy the current market upheaval caused by an over optimistic assessment of the the housing market and the value of loans made to people who couldn’t repay them. Is Government or either political party the best judge of how to deal with this problem or the collective wisdom of the market place?

I trust the collective, consensus wisdom of the people more than any politician or Government program. The market responds more quickly than any election cycle and with more prudent judgment that any politician. We, the people, by making our individual choices by the millions per day express our thoughts, our wisdom and projections for the future more directly and effectively than any Government bureaucracy. That is the free market at work. It reflects the thought and counsel of each of us and gives direction to the market and our economy. Any Government program is biased by politics and diminished by lag time and inevitably skewed by special interests. We, with all our faults and even those bad ideas by some, still come to a consensus on what is best. Let us control the economy with our choices, our mistakes, our victories. Remember the bread and circuses offered by the Government always come with a condition–loyalty to those who bestow them.

Ol Cranky


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