Friday, June 12, 2009

Banks' Fault or Government's Fault?

From the start of the recession the world currently faces, people have been clamoring for justice to come to the investment banks that supposedly started the downturn. The banks and their lobbyists supposedly have had Congress in their back pocket, pushing for things like deregulation and tax cuts. Now, with the bailouts now working in full force, even I'm beginning to believe this. But what is the most common solution to this problem? Give the government more power, so they can reign in those nasty bankers!

But wait a second--the power given to Congress even before the economic crisis was what the bankers used in the first place! Giving Congress more power to regulate, give tax cuts, and hand out subsidies will still end up with the wealthy and powerful in control. The problem isn't that the government had too little control over the investment and banking sector--it was that it had too much control, and that control was corrupted and abused. Only once Congress's power to dictate the path of the economy is gone will corruption cease. As some guy once said a while back, "government is not the solution to our problem, government is the problem."

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