According to the Wall Street Journal,http://online.wsj.com/article/SB123679308980797581.html#articleTabs%3Dcommentspreventing all future crises is not the goal. The goal is to prevent mishaps from burning down the world economy. I really agree with this issue. as article said, preventing all future crises would be the equivalent of banning stoves and furnaces. Here are three of the threshold questions that need pondering:
Who shall be saved, and who shall be allowed to die?
The goverment must draw a circle to identify which firms or kinds of firms will be saved.
How paternalistic should regulation be, and who should be the parent?
We're foing to get a gurdian even we know a gurdian could get mistake. The question is how much power to give it.
Can we install air bags in the financial system that deploy automatically?
There is the rules for each firms, so understanding each other would be the key.
3 comments:
-1 on Victoria for grammatical errors.
I think all of this is reasonable. What we need is for people in Congress and the legacy media to start crowing this line at decision makers. That doesn't seem likely.
The article states, "Nonetheless, we're going to get a guardian, and that's better than the status quo. The question is how much power to give it. The easy answer: enough to protect the system but not so much that it micromanages business executives or consumers who may choose to take prudent risks. The harder question is whether to give the guardian enough clout to, say, impose rules on borrowing when everyone is getting too giddy or to ban particularly risky strains of loans. Or whether, instead, the guardian should be the Paul Revere of the financial system, limited to shouting warnings."
I also ask this question. How much power do we give the government? I agree with this statement. Enough to help us out here and there, but not enough to turn the united states into a socialist country. If we give the government too much power, we are surely headed toward a form of dictatorship in the future. We cannot go on like we have been in regards to government power. The economy is a self correcting entity. It doesn't need a giant hand to help it if it happens to be in a recessionary period. The government must let the firms that are going to fail fail, and give the new firms a chance to re stimulate the economy with a more natural economic flow, rather than constant government bailout.
The government will always step in and assist during times of economic turmoil, often whether the public wants our taxes spent on it or not. I do believe though that the government should have rules about just how much they will help. If they stepped in to fix every failing company there would be a lot of really crappy companies out there. We can never really stop recessions from happening in the future; they are just a fact of the economy. How much we help out when they happen, is the important question.
Post a Comment