Government's Intervention

Our government has come up a new idea, after the $300 billion plan. This time they decide to invest $250 billion directly to nine banks instead of buying bad mortgages. In return, the banks will be under restriction of government. This plan is considered more practical than the previous one. Consumers show more confident in this plan because the stock index skyrocketed today. Unlike the $300 billion plan, this one at least put some restriction over chief executives in the bank. They need to compensate for what they did. There’s no free lunch in this world. This plan is not groundless though. Government’s intervention has its basis in history.

In such a crisis, we need some regulation. Although Americans have long embraced the ideology of “free market” and “deregulation”, these are the ideas applied during good times. “Ideology is a luxury good in times of crisis,” says Nancy Koehn from Harvard Business School. There is no absolute freedom without regulation, or people will go wild. We still support freedom, but that’s a relative freedom. Now, both political parties are calling for more oversight, and ideas for it abound, according to a post in New York Times. Government intervention may not be the best solution. But we may want to believe it’s the only choice.