news is opinion and everybody has one. I pretty much assumed that this is what would happen in this economy. There is not a single society that is purely socialist or capitalist. Pure capitalism is like pure democracy is acts like a sociopath. when policy can be put forth and voted on that the majority will prevail it's only a matter of time before the majority will discover that its survivability to is eliminate all minority groups through policy.
In a free capitalist market monopolies would prevail everywhere as there would be no regulative bodies to protect smaller companies, consumers, etc. Socialism begins when the first policy is put into effect. Government by its nature is socialist for its own survivability.
I think that everyone is the world is shocked that the bastion of capitalism has resorted to heavily regulating the markets and absorbing losses the way a Russia or China would. The nature of capitalism would be that no one is too big to fail and that the banks would learn their lesson when the carnage destroyed the worst offenders. Those that survived would be more cautious. Laws of survival. I don't think anything that happen were mistakes. I'm still a strong proponent of free market capitalism even in the current environment.
but I think that the writers here and a lot of other people have to realize that the economic system is very dynamic, it can regulate and deregulate as needed. It can adapt to the environment as needed. The problem is that the regulation and deregulation should be used to protect from bubbles and bursts. Regulate more as markets expand and deregulate more as they suffer.
What we should be doing in freeing up restrictions on wages, housing affordability, mortgage approval etc. Yeah it sounds crazy right now because we just came out of that environment and this is the result. But it works as long as we are willing to increase restriction as markets improve. Imagine how these CDOs would trade if in 2003-2005 when real estate prices started accelerating that we increased closing costs, increase property taxes, sales taxes, increased restriction on mortgage approval availability. housing prices would have not moved at a parabolic rate and it would result in a successive crash. Sure expansion would not have been great but we would probably still be in an expansion today and not talking about bailouts.
Humans... they will never figure it out.
