Another American bank falls over and Alan Greenspan of the Federal reserve says it is a 'correction in the market' the like of which happens about every 50 or 100 years. It is the worst correction since the 1929 stock market crash which lead to the Great Depression. In NZ finance companies are toppling over at record rates. Investors have lost millions and house prices have slumped. Is this just what you have to put up with in a free market economy or is it a sign that the free market actually needs some regulation and intervention?
There is a common factor in all of this and its the old deadly sin of greed. It is greed that causes banks to make ridiculous loans to people who can not afford them. Its greed that drives consumer demand for high interest rate returns and high risk investments. Its greed that causes people to speculate on the property market pushing house prices to extraordinary levels. No doubt greed will be a factor as people now seek to take advantage of other peoples misfortunes, in lawyers fees for extended legal battles, mortgagee sales, and further speculation in the property market. Its a high risk game with few winners and lots of losers. Free market capitalism is a natural ally of human greed and for this reason alone we need a third way in the economy that allows for enterpise and industry to be rewarded but greed to be kept in check.
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2 comments:
A Government should not step in and help out people who make bad choices.
You talk of Greed, well if Dr Cullen wasn't so greedy and taxing us every which he can, then most New Zealanders who work hard will have a bit of extra money in pockets.
Brett that seems like a very selfish and inhumane attitude. We all make bad choices from time to time and need help. What are you suggesting? Should we do away with health care for people who smoke, eat too much, drink alcohol or hurt themselves playing sport?
Do we leave it to the private sector and volunteers just like most third world countries?
Mr Cullen is not greedy he is a conscientious civil servant getting paid far less than he could earn in the private sector. He is taking taxes from people like you and me who can afford it so that all people when they need it through their own fault or no fault get assitance.
I'm very proud to pay my share of tax, because the government can and does do social welfare far better than I can or any community or private group that I know. I'm disappointed that we are getting tax cuts next month. It is probably in part pandering to greedy people like you with no sense of social responsibility.
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