Quote:
Originally Posted by KSig RC
Well, collapse can be part of the natural cycle . . . kind of like brushfires that allow a forest ecosystem to actually function correctly.
Bailing these companies out may only put off the problem - a short-term fix for a long-term problem.
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I can see this and it may actually create even worse problems. A free market has to include the possibility that businesses and industries fail. If the deal is that the federal government bails out private companies that screw up, aren't we inviting even greater risk taking OR a ridiculous about of regulation to prevent the government from assuming more risk in the future? Neither sounds that good to me.
But, I'm not sure that we can afford to really see this carried out with Freddie Mac and Fannie Mae right now AND I'm not sure that they were really private companies in terms of their practices and treatment before the current crisis. With them, there seems to be some actual government culpability that the government might be obligated to address. With any company that was strictly private though, it's hard to see how it's good long term policy to bail them out.