No. of Recommendations: 1
When there is massive government intervention, it is not even close to a free market.

If it is not a free arket why do they have to intervene?

They don't *have* to intervene. They *want* to intervene.

Free markets are not perfect, and that gives interventionists the opening they need to intervene. Unfortunately, their interventions invariably make things worse. That does not matter to them though. All that matters is that they have good *intentions*. If they have good intentions, then they just assume that the results of their interventions were good and that they just didn't do enough of it.

It's hard enough to predict what the consequences of government intervention are going to be, but government interventionists deliberately avoid acknowledging even the more obvious ways that government intervention may be contributing to the problem, which just makes the situation that much worse.

For example, consider deposit insurance. How might deposit insurance change the behavior of depositors and change the behavior of banks in negative ways?

And all this assumes that the intention of interventionists is noble. I think that it is pretty clear that there is a bit of "regulatory capture" going on. As I have said before, when you have Big Government deciding the allocation of resources instead of the free market, you can be sure that special interests will influence politicians to get their hands on those resources.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.