U.S. is a strong proponent of laissez-faire capitalism.
Generally speaking, laissez-faire capitalism is understood to be a doctrine that maintains that private initiative and production best be allowed a minimal of economic intervention by the state beyond what is necessary to maintain individual liberty, peace, security and property rights.
Proponents argue that the laissez-faire produces greater prosperity and personal freedom than other economic systems. U.S. has proudly been the model of freedom in trade and such intervention by state as bailout had been jeered at by Uncle Sam as a bad practice.
I still recall way back in 1998 when Malaysia was gutted by the Asian financial turmoil, DM called out loud to curb the speculative trades and he imposed restriction on ringgit exchanges. What followed up was a mountain of boos in international arena.
This year I saw U.S. taking curbs and bailouts to save the meltdown of its financial system. From the shotgun marriage of Bear Stearns to JP Morgan (by the Federal Reserve which ordered the latter to buy over the former), the bailouts of Freddie Mae, Fannie Mae and AIG, the proposed legislation to restrict wild speculations on oil to the curbs on shortselling of bank stocks, it shows that once viewed as a disgusting intervention measure is now being resorted to by the world's biggest economy.
It is far too sketchy to comment on the doctrine of laissez-faire and the flaws in Uncle Sam's financial system now, but this wave of woes do exhibit that DM was not too wrong to curb frenzied speculations in 1998.
Seriously, if not by curbing and bailing out, what else could Ben Bernake do?
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