Editorial Overview

Is the current crisis proof conservative economics is wrong?

A banking crisis of massive proportions — at last look requiring perhaps a $1.5T bailout — has been the focus of government action for some time now, with the gurus of Wall Street strangely silent, and the perps who engineered the crisis — those big-brained big-time investment house geniuses — sneaking out the back door. The government is buying stakes in banks, and will even be setting up and running investment institutions. The private sector caused it, didn't see it coming, and has no answer for it. Is this proof-positive that conservative economics is a thing of the past?

Conservative Response

It is unfortunate that people are looking to liberal principles to solve a financial crisis caused by liberal government. We are looking to government to get us out of a government-caused mess.

Many are calling for more regulation as the savior of the system — and of people's investments. But the system was regulated — highly regulated. Ratios for cash-on-hand to loan amounts were in place. Rules governed the process, and we are not seeing a line of Wall Street suits awaiting prosecution for breaking any of these rules. Read more...

— Editor

Liberal Response

Liberalism won long ago. When laissez-faire capitalism drove us and the world into the Great Depression, and people did not have a safety net of programs to protect them, they turned to their government to reform the system. Since FDR's New Deal, there have been no more depressions, great or otherwise. There have been dips in the business cycle, but government intervention in prudent amounts has righted the ship. In 1975, monetary policy limited the damage done by the oil shocks. In 1980, the Fed calmed the uncertainty caused by inflation by wringing inflation right out of the economy. A recession ensued, but then followed a long run of steady growth. Read more...

— Editor

Alternative Response

Let's say this up front: in self-sufficient, self-reliant, free America, we should not be in the business of bailing out failures. If they fail, someone comes in and picks up the slack with innovation and hard work. Then, hard-working people will take up the newly-created jobs and the economy will move forward. In the meantime, churches and civic organizations will help people, and they'll do a better job than bureaucracies. Read more...

— Editor

Author

Comments

K. Winter
12/18/08

It is interesting, and very sad (bordering illegal) that the big economic companies that caused this meltdown are getting away without punishment. These large companies are coming to the US government begging to be bailed out. This is the same government these companies spent millions lobbying to get less regulation. The even scarier thing than the economy failing because of poor regulation on risky investments is that the government has to bail these companies out, for fear of another great depression. However all of these things do not mean that conservative economics is a thing of the past. For the foreseeable future, yes, conservative economics have failed and the country is looking for liberal agendas to bail it out... Read more...

S. Rayls
12/9/08

America Wake Up

We have just gone through another election and for a second time a President Elect has come forward and asked for help in maintaining a bi-partisan effort with his administration. Not being a Democrat per say, I only wish I had written this at the beginning of President Bush's administration, who also asked for a bi-partisan effort during his inaugural speech, but since that time is lost and gone forever... Read more...

Y. Guzman
12/8/08

I want to comment on this view because I don't agree with the Response. If we don't let the government help us then we would never be able to get out of the recession, and if we let the government control it then we would be a communist country. In my opinion I think that it is perfectly fine for the government to intervene with the problems of society especially when the problems are economical. If the government would not try to solve the problems in society then we would not be a mixed economy. However the government can not interfere too much because then it would turn into communism.

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