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We don't have a 'free market'
September 29, 2008 - Lee Smith
The United States has had a progressively more mixed economy (more government taxes, intervention, interference) since the progressive era of the early 1900s. Major intrusions were ramped up during the Great Depression of the 1930s, thus prolonging it, and the 1960s, when Lyndon Johnson put forth the "Great Society," which included welfare and Medicare. Despite a re-emergence of "conservatism" in the past several decades, government has not gotten smaller. Just the opposite. To say the United States has a free market is a farce and an intentional slander, meant to move us toward more government controls.
The bailout for the financial markets making its way through Congress right now comes on the heels of government acts that helped prompt the need for the bailout. Mortgage giants Freddie Mac and Fannie Mae are government-backed creations that helped drive the overspeculation in housing in recent years. The Community Reinvestment Act pushed bankers to lend more money to credit risks so that those credit risks could own homes. The federal government exempts interest on mortgages from income taxes to encourage home ownership.
The issue now is whether the government should respond to the crisis it helped manufacture. The alternative may be financial gridlock, which would hurt every American.
While the debate continues, some opponents of the bailout snarl at the notion of helping Wall Street. Yet they have no problem when the government intervenes in multiple other facets of life, from education, to citizens' retirements, to their health care, to the aforementioned basic economic structure. I'm not suggesting Wall Street is right. Bankruptcy, liquidation or insuring the bad debt could serve the purpose required. But Wall Street has just as valid an (immoral) point as any other group that relies on government largesse to take care of it.
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