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Once upon a time, a certain nation decided that their financial industry was too constrained. "Let the markets decide" became their mantra. CEOs and bigwigs insisted that "Government regulation is strangling us!"
In response, the markets were allowed to grow without restraints and under minimal regulation. More and more exotic and poorly understood "investment instruments" were introduced by financial geniuses. But one day, these bizarre derivatives were found to be hollow shells, sold for many times their real worth.
The free markets demanded that some large investment companies be driven out of business.
"But we're too large to be allowed to fail!", they claimed.
In a gesture of generosity unmatched in the history of civilization, the people rallied behind these companies and socialized the tremendous "free market" debt.
It remains unkown whther or not everyone lived happily ever after.
Once upon a time, a certain nation decided that their financial industry was too constrained. "Let the markets decide" became their mantra. CEOs and bigwigs insisted that "Government regulation is strangling us!"
In response, the markets were allowed to grow without restraints and under minimal regulation. More and more exotic and poorly understood "investment instruments" were introduced by financial geniuses. But one day, these bizarre derivatives were found to be hollow shells, sold for many times their real worth.
The free markets demanded that some large investment companies be driven out of business.
"But we're too large to be allowed to fail!", they claimed.
In a gesture of generosity unmatched in the history of civilization, the people rallied behind these companies and socialized the tremendous "free market" debt.
It remains unkown whther or not everyone lived happily ever after.
Too bad government had to step in and force these private companies to loan money to people who couldn't afford to pay it back. I wonder how the story would have turned out if the government had left well enough alone.
Probably an urban legend. But an excellent description nonetheless. It illustrates the intentions of socialism, the way it's often implemented... and the unintended consequences that lead to the actual result.
An economics professor at Texas Tech said he had never failed a single student before but had, once, failed an entire class. The class had insisted that socialism worked and that no one would be poor and no one would be rich, a great equalizer. The professor then said, "OK, we will have an experiment in this class on socialism."
All grades would be averaged and everyone would receive the same grade so no one would fail and no one would receive an A. After the first test the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. But, as the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided that since they could not make an A, they studied less. The second Test average was a D! No one was happy. When the 3rd test rolled around the average was an F.
The scores never increased as bickering, blame, name calling all resulted in hard feelings and no one would study for anyone else. All failed to their great surprise and the professor told them that socialism would ultimately fail because the harder people try to succeed the greater their reward but when a government takes all the reward away; no one will try or succeed.
H/T Shelly
Cute story, Total urban legend. It's easier to get the answer you want when you make up the facts.
Once upon a time, a certain nation decided that their financial industry was too constrained. "Let the markets decide" became their mantra. CEOs and bigwigs insisted that "Government regulation is strangling us!"
In response, the markets were allowed to grow without restraints and under minimal regulation. More and more exotic and poorly understood "investment instruments" were introduced by financial geniuses. But one day, these bizarre derivatives were found to be hollow shells, sold for many times their real worth.
The free markets demanded that some large investment companies be driven out of business.
"But we're too large to be allowed to fail!", they claimed.
In a gesture of generosity unmatched in the history of civilization, the people rallied behind these companies and socialized the tremendous "free market" debt.
It remains unkown whther or not everyone lived happily ever after.
My goodness that is a fairy tale if you think our financial markets are minimally regulated, it was a regulation CRA that contributed to this fine mess. Also it was the republicans who sank TARP initially and was pilloried. Most conservatives do not support the bail outs let the free market reign chapter 11 works as GM is about to find out.
It turns out the banks don't much want the bailout either but are not allowed to pay the money back.
Too bad government had to step in and force these private companies to loan money to people who couldn't afford to pay it back. I wonder how the story would have turned out if the government had left well enough alone.
You are misinformed, grasshopper.
The large majority of subprime loans were NOT made by CRA banks.
One must be vigilant and not listen to "news" sources whose objective is to deceive and not inform.
Too bad government had to step in and force these private companies to loan money to people who couldn't afford to pay it back. I wonder how the story would have turned out if the government had left well enough alone.
You wanted MORE of the Bush years??? Economy going down further??
My goodness that is a fairy tale if you think our financial markets are minimally regulated, it was a regulation CRA that contributed to this fine mess. Also it was the republicans who sank TARP initially and was pilloried. Most conservatives do not support the bail outs let the free market reign chapter 11 works as GM is about to find out.
It turns out the banks don't much want the bailout either but are not allowed to pay the money back.
Please to read post numba 18.
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Here's an even BETTER example...
