Jan 24 2009
Barack Obama, Free Markets, and Recovery from the Present Economic Crisis
In Barack Obama’s Inaugural Address, I found another highly praiseworthy and correct sentiment: “Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished. But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions — that time has surely passed.”
The present economic crisis has not destroyed any physical capital or killed any workers; nor has it limited anyone’s physical or intellectual skills. In order for individuals to work at their full potential and produce as much as they did before, two components are necessary: (1) restructuring of ownership and (2) renewed motivation to work and succeed. Obama may be able to provide the second to many people; the first can only be accomplished by the invisible hand of the free market. During a recession, firms must be allowed to go bankrupt, change owners, and be sold out. If prior owners of assets mismanaged and misallocated them, then it is time for the assets to change hands and be managed by other more competent and prudent individuals. Government bailouts and protectionism only hinder this structural readjustment by keeping afloat firms that need to implode because of past imprudent decisions. The physical assets and workers of those firms will still remain available for others to use.
Hopefully, Obama will genuinely attempt to cease “protecting narrow interests.” The way to do this is to end the massive government subsidies, bailouts, and trade barriers that favor a select few politically connected companies at the expense of everyone else. I have no problem with Obama using his rhetoric to motivate and inspire people. However, I hope that he does not turn his silver tongue against the only long-term, stable solution to this economic crisis – the free market: the uninhibited energies of hundreds of millions of motivated, creative, productive Americans.
Sincerely,
Gennady Stolyarov II
It was the greed of a select few in the free market that brought about this crisis.The banks and their lobbies who didn`t want more regulations . Said they didn`t need them and what happen the market crashed. However, if the former president had put those regulations in place maybe this crisis would not be as big as it is.
I blame some people in the free market for this disaster and am in favor of some regulation but the Democrats are also partly to blame for forcing banks and other financial institutions to give mortgages to people who would not have qualified for them under ordinary standards. As Democratic congressman Artur Davis of Alabama has said.”Like a lot of my Democrat colleagues I was too slow to appreciate the recklessness of Fannie and Freddie when in retrospect I should have heeded the concerns raised. I wish my Democrat colleagues would admit that we were wrong.”
http://politicalanimal.today.com/