Hands-off government best option
Ryan Lyk
Issue date: 11/4/09 Section: Opinion
In the New York Times article "Trying to Rein in 'Too Big to Fail' Institutions," the government wants to make it easier to bail out corporations on the brink of collapse. The government will also be able to "throw out management, wipe out the shareholders and change the terms of existing loans held by the institution."
Some may view this as the classic question between small and large governments, but it is more than that. What the bill implies is that when a business is about to die, divine intervention from the government will take place and rescue it from its demise. The argument goes that the government needs to do this because if the business fails, jobs will be lost, business will be lost, and many people who rely on the corporation and its services will suffer.
This type of "death" is really no different than a standard death (minus the emotional aspects, of course). When a person passes away, a time of hardship and mourning follows. This could be either financial difficulties, or just plain emotional distress. When a business goes bankrupt and virtually disappears, all those who were attached to it go through a period of financial and emotional hardship.
Should that factor be enough to say that the natural order of things needs to be stopped? When a loved one passes away, do people usually move on? Most of the time. It seems to be only the emotional aspect that keeps people attached longer than expected. With businesses, there probably isn't a relationship based on love, but more so on money. Finances usually work themselves out. Adjustments need to be made, but it seems as if the system can help itself.
After a corporation goes under, unemployment rises, and people who relied on that business no longer have the service provided. This can range from insurance to basic commodities. This should probably be avoided at all costs, right?
For example, when Business A goes bankrupt, the people working for it lose their jobs. Since businesses are generally competitive, they stick to their respective territories. When a new territory opens up, that means there is room for expansion. Soon, as the market shows us, Business B will move in and absorb most of the laid off employees. It is called competition, and when one loses, they need to actually lose, and not get a second, third, and maybe a fourth chance.
If it is a service that is needed, another business will step in to provide it. If we invest money into one single business, that gives them a financial backing that no other competitor can compete with. This makes the market unequal, and prevents us from moving forward in the way nature intended.
In the past, government has simply let an issue sort itself out and let the problem fades away.
Should we be acting in similar behavior to what did not work before? It seems like a "hands-off" government has more validity to it than being just a conservative talking point.
Some may view this as the classic question between small and large governments, but it is more than that. What the bill implies is that when a business is about to die, divine intervention from the government will take place and rescue it from its demise. The argument goes that the government needs to do this because if the business fails, jobs will be lost, business will be lost, and many people who rely on the corporation and its services will suffer.
This type of "death" is really no different than a standard death (minus the emotional aspects, of course). When a person passes away, a time of hardship and mourning follows. This could be either financial difficulties, or just plain emotional distress. When a business goes bankrupt and virtually disappears, all those who were attached to it go through a period of financial and emotional hardship.
Should that factor be enough to say that the natural order of things needs to be stopped? When a loved one passes away, do people usually move on? Most of the time. It seems to be only the emotional aspect that keeps people attached longer than expected. With businesses, there probably isn't a relationship based on love, but more so on money. Finances usually work themselves out. Adjustments need to be made, but it seems as if the system can help itself.
After a corporation goes under, unemployment rises, and people who relied on that business no longer have the service provided. This can range from insurance to basic commodities. This should probably be avoided at all costs, right?
For example, when Business A goes bankrupt, the people working for it lose their jobs. Since businesses are generally competitive, they stick to their respective territories. When a new territory opens up, that means there is room for expansion. Soon, as the market shows us, Business B will move in and absorb most of the laid off employees. It is called competition, and when one loses, they need to actually lose, and not get a second, third, and maybe a fourth chance.
If it is a service that is needed, another business will step in to provide it. If we invest money into one single business, that gives them a financial backing that no other competitor can compete with. This makes the market unequal, and prevents us from moving forward in the way nature intended.
In the past, government has simply let an issue sort itself out and let the problem fades away.
Should we be acting in similar behavior to what did not work before? It seems like a "hands-off" government has more validity to it than being just a conservative talking point.
Be the first to comment on this story