Months ago, when the financial system stared to collapse I commented to a friend of mine that I was hoping that the government and the fed won’t help any of the institutions in trouble.
The root of free market goes against helping these banks and any other institutions. I post in my blog, that under a free market, the market will fix it self, and whoever has to go down we should let it be. It’s a fact that under Frederic Roosevelt administration with his regulation measures and Keynes influence it delayed United States of getting out of the great depression.
Amazingly the opposite has been done since this summer, the Fed and Bush administration sent a clear message: ” they will back up any institution in trouble”, now here is the problem; if I tell a kid that they are giving candy on house#23, and he goes there and indeed are giving candy…….what’s going to happened? It won’t take that much time to see a line of kids in front of house #23 expecting to get candy too, and that exactly what’s happening now first was the financial institutions, now is the automotive industry, in part because ownership never made transition to small consumption cars, and also because unions, the automotive unions have a unrealistic retirement plan that will retire any employee of this industry with 100% of their salary, which is unsustainable e under any business model.
Once again I plea to elected Obama, and president Bush not to Bail out the automotive industry, if the let them fail, another one will come and fill that space, with a better product, the market always going to be there, a lot of jobs will be lost, but government just can’t be responsible of every industry, the government it’s just an administration of the country not a printing money institution.