How Free Market Is The U.S Economy?

[greywar]

Originally Posted by Mircea

The funny thing is that neither of you could tolerate life with failed banks.

Apparently neither of you are aware that a series of cascading bank failures worsened the Great Depression.

you mean like Iceland has become intolerable....oh...wait....no it hasn't.

The major problem with bailing out failure in a capitalistic society is that by doing so we encourage the very risk that caused the issues. On the other hand-I agree with you in some ways as well. It would have been far worse if we hadn't, but part of that is BECAUSE we have bailed them out before.

I think the solution should have been letting MORE of them fail, but not all of them. Lehman brothers was not sufficient. Not many more, because of the associated damage, but certainly many more then we did. We can see from a lot of the new behavior lately that they really didn't learn

[le roi]

Originally Posted by Hoonose

Ah, but the more successful, rich and powerful capitalists had the most to lose. So banks were bailed. Thank gawd!

IMO we have relatively free markets in most sectors. HC not so much.

I generally agree. Most of our markets are relatively free.

However we have major problems in certain markets, e.g.:

Telecom monopolies
Real estate / land overcapitalization
Banking concentration, overcapitalization, and implicit subsidies
Overreaching intellectual property law, creating mini-monopolies in areas like medical devices and media.

[le roi]

Originally Posted by Mircea

The funny thing is that neither of you could tolerate life with failed banks.

Apparently neither of you are aware that a series of cascading bank failures worsened the Great Depression.

What you, and most "pro-corporatist" types don't seem to grasp is :

There is a difference between the banking system and individual banks.

As long as the Fed is willing to create money and lend it -- like it does on a daily basis -- it doesn't matter how many individual banks fail. Their ATM's aren't going to explode. Deposits aren't going anywhere. They will simply auction off the bank's equity and assets to new owners, slap a new logo on the front, and business as usual will resume.

The purpose of the fed is to act as a backstop to the banking system as a whole, not to prop up specific individual banks, their failed management, and their shareholders.