one thing ive been thinking about is the bear stearns bailout, and whether or not i support it. now of course, my endorsement of this move doesnt matter to anyone, but still i think its an important issue for anyone interested in government and politics to answer for themselves.

initially i for the most part supported the bailout, including its concept, because i figured it was functionally necessary. the repercussion potential of bear stearns going under seemed scary, and it seemed like it would be the government's job to cease that ripple effect from affecting all of us. this same theory applies to the concept of bailing out banks and other places who are suffering from the fallout of the housing bubble and the subprime crisis. stepping in and stopping the problem from getting any worse seems like a good idea.

however, i recently read (the headline) of an article where the governor of the bank of canada would not bailout any lenders who are suffering because of their bad loans and would only provide liquidity when deeply needed. the idea is that if banks or other financial and investment firms know that there is a safety net (in this case, the federal reserve) from bad decisions. theoretically this would cause banks to give bad loans and be bailed out because of the ripple they would have on the rest of the economy. i found myself agreeing, and soon i was in conflict with myself over my own ideology. i began associating that same theoretical backing and applying it to other things.
for example, say there is a small country with an enormous auto industry. a good percentage of the population is invested in this industry in some way, whether it be by working there, working with their products (like auto dealers) or being invested in it. now if the corporation makes a bad decision, such as not using new technology because it would be cheaper to manufacture and mass produce, while other foreign companies import cars better in most every way. people no longer want to buy that company's products, and soon it starts losing a lot of money. to counteract this the company will obviously cut back production and lay off workers. should the government bail out this company, assuming that letting it go under would lay off a huge percentage of the population and lose an enormous amount of money?

in a society where this would be commonplace, the auto industry would likely continue to not progress, knowing that they can still produce and sell their product for cheap (possible tariffs to keep out better cars) and bailed out whenever they lose too much money. the "bailing out" could become fairly commonplace, with the company having days where it makes money, and days when it loses money (from not selling enough and paying too much) the government will pay the debt. essentially the company will continue to be propped up by the government, continuing to pay excess amounts of workers high wages (if the workers are few or low-payed, why would the government bail them out?) and not making any progress due to no real motivations.

this sounds horrible because it assumes that without any prospects of wealth or bankruptcy, an industry would become incredibly stagnant. but it would seem naive to assume that people and companies would invest their skills or money in a possible advance in technology or efficiency out of their own personal "goodness".

well basically my end question is what do you think government intervention in economic sectors should be? obviously this is a huge factor in political ideologies, but id prefer if you leave out any potential factional name-calling because i really want to debate it on the merits ive presented rather than who can make the best gay joke.

Good luck.

theyre having a bear of a time :grumpy: