To cut the chase, Angel, what I'm trying to say is that the
theoretical framework of what we perceive as the free market isn't
as free as we think it to be. Yes, we can buy and sell freely, but
just simply look at what you are purchasing with your monthly purse
every month - Electrical Bills (Singapore Power - Semi Government
Owned Monopoly), Petrol (Oligopoly), Banks (Cartel Oligopoly). The
'Free-Market' aint that free after all right?
Free trade - sounds very nice with the comparative and absolute
advantage theroms. Truth is with every free trade agreements being
signed, certain nations have to close down part of their
industries, so as to barter with the other side - in the process of
people lose jobs. One can argue they can gain from the trade off,
but at whose expense?It takes years and time to retrain workers,
there is no such thing as perfect labor flexibility - where you can
just take one worker in a guns factory and make him bake bread the
next day. Free trade sounds great, but it has the lingering hand of
the government intervening in the market as most libertarians will
call it.
Yes, indeed I grant you the assumption that we are free to buy
what we want, and we have to be responsible for our choices, but
one cannot just argue that because of this, we have a free market,
therefore those people who made bad investments got their just
desserts for their bad investment choice. Because even in the
quasi-'free market' we have, the firms themselves make bad choices.
As I was saying in my previous post, the leviathans of the
corporate world who saw "an opportunity" to increase their stake
and made bad loans to people with poor credits, and ended up going
bust. Under you assumption since they made bad choices, shouldn't
they be responsible for those choices and be allowed to go under,
just like all the other bad investments made? Yeah Lehman Brothers
is gone, but the governments of the world have raised trillions of
dollars to ensure that other firms do not go under. I'm not saying
this is wrong, the rescue packages put out by gvernments is the
right thing to do under the prevailing circumstances. But it also
shows clearly, that we are not operating under a free market
economy.
The Resue Plan was constructed on the basis that should such
firms collapse, there will be a series of ripple effects, which
will be deatremental to the global economy. People will lose their
jobs, etc. The rescue plan is governmental intervention, an
anti-thesis of any free-market ideology. Ron Paul was crying foul
when Congress announced the 700 billion dollar aid
package.
People make bad decisions all the time, and usually they end up
with real drastic consequances which affect not just themselves,
but everyone else. It is unrealistic to ask government to come out
with a rescue plan for these bond buyers, cause it is just
impratical. But what government has to be doing is to widen the
social safety net at this time so as to ensure families who are
affected by this can at least go on with their lives. We are
talking about children, families, who do not deserve to bite the
dust just because dad or mum made a wrong investment. I myself, my
dad lost his job in the 97 crisis, I know what it is like.
Thankfully, I have really generous and loving relatives, but I
belief they are many out there who have nothing to lean on.
Practicalism or Overt Practicalism can just blind us to the
needs of those around us.