Guided Response:
Respond to at least two of your fellow students’ posts in a substantive manner. Some ways to do this include the following, though you may choose a different approach, providing your response is substantive:
Agree or disagree with your classmate’s position. Defend your position by using information from the week’s readings or examples from current events.
1. In response to the government regulation (policy makers) preventing or mitigated the credit crisis of 2008, the federal government had choices to make and who to bail out. The executive branch of the government has also been closely involved in maintaining stability in the financial system. These efforts have included direct aid to a number of prominent financial firms. On September 7, the Federal Housing Finance Agency (FHFA,) in conjunction with the Treasury Department, placed Fannie Mae and Freddie Mac under conservatorship as part of a four-part plan to strengthen the housing agencies. In addition to the two bailouts the federal government chose to bailout AIG with an additional $85 billion far past the $100 billion amount initially planned. Despite the Fannie Mae, Freddie Mac and AIG bailouts, conditions continued to deteriorate throughout September 2008, and it became increasingly clear that the financial system was approaching the brink of complete collapse. This could of been prevented by the federal government regulation by not anticipating the mortgage company’s collapses and giving them bailout money before they were bankrupted because they took the billions of dollars and protected themselves and instead of the tax payer.
Government regulation of businesses should do only those things that cannot be done more efficiently by the private sector, e.g., provide for common defense, courts; facilitate trade, i.e., those things allowed by our Constitution. Allowing competition usually results in the best product or service for the least cost. Therefore it is suggested that our medical and postal systems be privatized by cutting down their Federal subsidies over the next four years as well as the Departments of Agriculture, Energy and Education.
References:
http://www.aim.org; Retrieved on August 19, 2014
http://www.investopedia.com; Retrieved on August 19, 2014
2. If the government were to put certain spending and buying regulations into place, this may have quelled the credit crisis. The video illustrated a very simplistic depiction of the mortgage, buying, spending epidemic that happened during the huge housing boom in the early 2000s where seemingly predatory mortgages were given out to unqualified buyers. The government may have put regulations into place that allowed for higher credit approvals or down payments, regulations on dollars spent by individual investing agencies into unqualified mortgages, or, had a system with checks and balances so that every dollar invested outward toward an unqualified mortgage had to be protected and ensured by the banks so that the liability relies on the banks with the money vs the consumers who were asking the banks for loans.
However, with most regulations there are typically two outcomes. The first outcome is that those with money and leverage would find ways around the regulations. Investors with money would find a way to get unqualified home owners into homes regardless of regulations. Second, if regulations were too strict, those looking to profit would call them unconstitutional. The government, they would say, has no right to tell banks and investors who they are allowed to loan money to. It is out of the jurisdiction of the government how to evaluate a risky loan and metrics in place would be unfair.
Governmental regulation is a thin line to tread. On the one hand, a business is going to want some government regulations in order to maintain order and ensure that all business owners are acting and conducting business in an ethical manner. On the other hand, this is a free market and if the government gets too involved and political interests and business interest ever cross, this may give an unfair advantage to some businesses, or create a socialistic market. Governmental impact should be left to as little as possible, however, to ensure the free market system, other than setting general standards that businesses are to abide by and to prevent monopolies from forming. The government poses a larger threat to businesses and the market overall by over regulating than they pose to the greater good by under regulating. Even though it can be argued that a lack of regulations led to the economical collapse of the early 2000s, greed was the underlying issue. Brokers and banks loaned money to those who were unqualified. If the government were to add sanctions and regulations, greedy people would still find a way to act unethically in order to make money. In a sense, the government cannot control greed, so it is best that they do not try to over regulate and overstep their bounds for ethical businesses.
The Crisis of Credit Visualized: http://vimeo.com/3261363
4. I believe that US first of all need to separate its government from the private banking system. The country must regain its power and control of its money supply. Medical and educational system should not be privately owned and should not be treated as service to people but as a necessity provided by government for the full development and support of the people. American citizens have full right for medical and educational care from their government to whom they are paying such high taxes. I think that government regulation needs to ensure ethical conduct with businesses y allowing new mothers to have plenty of paid time off in order to take care of the their new child and help with daycare expenses in the beginning when returning to work. These should be benefits that overall could help a new mom with less depression and or mental health issues that are endured with the stress of having a baby. The government helps those who are not doing anything to benefit their life but do not go the extra mile to help mothers who work hard and decide to have a baby. I think that this would help the greater efficiency of a workplace, good employee value and overall it si the right thing do for those who earn it. The different views on this is as a new mom you are supposed to just drop off your precious baby and return to serve the workforce that does not support you, overall the moral is low and does not help that returning mom to the workforce.
Waldfogel, J. (1999). The impact of the family and medical leave act. Journal of Policy Analysis and Management, 18(2), 281-302.
4. The role that the government regulation should play to ensure ethical conduct by businesses is intervening in businesses to make sure that they are not acting unethical, where they can hurt others, or even giving individuals a opportunity to sue for a lump sum of money. The sum will be large enough where the business cannot do such conduct in the near future. Businesses who act unethical need to taught a good lessen, and not get away with unethical behavior. These suggestions is a way that can help prevent it from happening or happening again.
Conservatives say that the market should be allowed to punish unethical conduct on the part of the business (Student News Daily.com, 2010). This issue can only happen if people are allowed to sue. Like, if businesses act negligently, and you get injured on the job, it is not enough to hurt the business by putting it out there for everyone to know about. You have to make the individual whole for whatever damages that were done. If an injured individual are able to sue to have the right to sue, and gain substantial damages, there would be fewer government regulations needed. However, if the party cannot sue for substantial damages, then government regulations is definitely needed.
Student News Daily (2010). Conservative vs. Liberal Beliefs. Retrieved from www.studentnewsdaily.com
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