Generally, I agree with Friedman. However, what we as a society seem to be missing is that it is in our own long-term self interests not to be so greedy, not to push the system as far as it will allow, not to take advantage of every opportunity when it is disadvantageous to someone else, because the collective failure of the system is bad for our self-interests. The mortgage crisis is a perfect example of that: too many people acting greedily, without regard to harm to others, and eventually the system collapses from being pulled in too many opposing directions. Then we all suffer. And then, suddenly, we collectively whine and moan and demand for someone (i.e., the government) to do something about it. And the government responds. Like a parent to a naughty child.
Lots of folks get upset at the phrase "spreading the wealth." Folks don't want government sticking its nose in our finances and playing some modern-day version of Robin Hood. But we're screaming for that help now, as shut-downs, layoffs, loan-freezes, and other market-stopping events happen as a result of our collective poor decisions. We would have no need for oversight, for bailouts, for multi-billion-dollar stimulus packages were it not for our own irresponsibility. --If mortgage companies had thought about the long-term harm of bad loans with variable interest rates rather than the short-term benefit from selling those loans; if home buyers had stayed within their means; if appraisers had not continued re-upping the "value" of real estate; if any one type of player in that system had thought about what was good for everyone involved in those transactions. If we had been more responsible, we wouldn't be here, begging for help.
So, we can blame our representatives, our presidents, our governmental bodies for spending all of this money for the various rescue attempts; but they are only doing that which we've requested. We're the guy who went parasailing in a hurricane. Should we leave him stuck in the tree because of his stupidity? Or do we organize a rescue effort?
I don't really know the right answer to the question. My instinct is to let us get ourselves out of that tree, to learn something from the painful stupidity. But I'm not an economist, and I don't know if we can get ourselves out. Irrespective of the right way to get out of this mess, though, I think we should be sure to (to paraphrase the evil catch-phrase from the election) "spread the blame:" we wouldn't be talking about nationalized banking systems and bailouts if we had managed ourselves better.
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I'm just going to throw out some thoughts...
Who do you think generally makes more money, the owner of a small, one-store retail company or the owner of a large, multi-national, multi-store company in the same industry?
Which owner do you think works more?
Do you think one company has a market advantage over the other?
How level is the playing field? Does one type of company have the upper hand or is there some "unfairness" in selling product because of market forces?
Now, let's say that because of name recognition and ability to acquire strategically better locations, the large company has an advantage over the smaller company. But the small company has its niche and grinds away day after day, making ends meet. The small company is important and though the small company recognizes the disadvantage it has in the market, it accepts this role and digs it's own trench. But then the government steps in. It doesn't know anything about the reality of the market. It only sees numbers, and it sees that the big company is much more important than the small company because the big company employs many more people. So the government gives the big company money and support so the big company won't kill itself in the market. So the big company gets lots of breaks and the small company pays for those breaks. In other words, the government takes a portion of the sales from the small company and gives that money to the big company.
Eventually maybe the small company grows weary from the toil and "redistribution" of "wealth," and decides to give up and go to work for the big company. But the problem is, there are a lot of these small companies. And over half of the jobs in the US are with these small companies. 80% of new jobs created each year are with small companies. And 99.9% of all companies in the US are considered small companies. So the government can go ahead and support the big companies with the small companies' money, but if they keep chipping away at it, tilting the playing field until small entrepreneurs don't want to fight it any more (and that would take A LOT, that's why they're entrepreneurs), the economy will TRULY be in dire straights.
Check this out: http://www.sba.gov/advo/stats/sbfaq.pdf
Just a thought. This whole thing seems abstract until I think about the possibility that the government will give Starbucks money that came out of my pocket. Now THAT's bullshit. And it's happening to companies (and by companies, I mean people) in every industry that the government is "bailing out."
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