Free Market? Really?

This blog is not going to turn into the ramblings of a disillusioned believer in the Adam Smith school of economics. For you non-history buffs, Smith introduced the concept that free markets (i.e. non-regulated) are the most efficient way for economies to thrive. Smith didn't count on the domino effect that the demise of a bloated cornerstone of industry might cause.

Bank bailouts. Did anyone put a gun to the heads of the lenders when they made those questionable loans to questionable borrowers? Nope - it was business, and for the last few years, business was good.

Did anyone put a gun to the head of the borrowers when they accepted the terms of those loans, most of which entailed certain rate adjustments in the first 2-3 years of the loan? Rate adjustments that were, even at that the day they took out the loan, certain to substantially raise their monthly payments? Nope, they were just happy to get the house they thought they could never afford. And they were right.

Auto bailout? Let's give money to the most inefficient industry on the planet - the American car companies. Between the labor unions, pension commitments, and poor quality, it's going to take alot more than a check to save their future. Major restructuring has to happen.

So, in the end, we are creating one heck of a deficit burden. One that will likely dethrone America as the premier economic powerhouse. A status we've maintained for the last sixty+ years. Quite a legacy for the next generation.

Free market? Apparently not.

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