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As a conservative, I have watched with increasing concern as the left wing of the Democratic Party has pushed for greater control over the US banking system. This push has been fueled by a misguided belief that the banking system is inherently corrupt and that only government intervention can save it.
However, as renowned conservative economist Milton Friedman once said, “The government solution to a problem is usually as bad as the problem.” In other words, the left wing’s proposed solution of greater government control over the banking system would likely only exacerbate the problem.
If the left wing of the Democratic Party continues down this path, they risk bankrupting the very system they seek to control.
One of the key ways in which the left wing of the Democratic Party seeks to take over the banking system is through increased regulation. However, as Nobel Prize-winning economist Friedrich Hayek once observed, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”
In other words, the left wing’s attempts to design a better banking system through regulation are likely to fail. As Hayek noted, the economy is too complex for any group of individuals, no matter how well-intentioned, to fully understand or control.
Indeed, history has shown that increased regulation often leads to unintended consequences. For example, the 2008 financial crisis was in part caused by regulations that encouraged banks to take on risky loans in the name of increasing home ownership.
As conservative economist Thomas Sowell has noted, “It is amazing that people who think we cannot afford to pay for doctors, hospitals, and medication somehow think that we can afford to pay for doctors, hospitals, medication and a government bureaucracy to administer it.”
The same principle applies to the banking system. If the left wing of the Democratic Party seeks to take over the banking system through increased regulation, they will have to pay for an enormous government bureaucracy to administer those regulations. This will ultimately prove to be more expensive than any benefits that might be gained.
Furthermore, increased regulation will stifle innovation and competition in the banking industry. As renowned conservative economist Adam Smith once observed, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
In other words, if the banking industry is tightly regulated, it will be much more difficult for new entrants to compete with established players. This will lead to less innovation and higher prices for consumers.
Another way in which the left wing of the Democratic Party seeks to take over the banking system is through the creation of a government-run “public option” for banking. However, as conservative economist Milton Friedman once noted, “A major source of objection to a free economy is precisely that it gives people what they want instead of what a particular group thinks they ought to want.”
In other words, the creation of a government-run “public option” for banking would be a classic case of the government picking winners and losers. It would also create an unfair advantage for the government-run option over private sector competitors.
Furthermore, a government-run “public option” for banking would likely be inefficient and expensive. As conservative economist Friedrich Hayek once observed, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”
In other words, the government’s attempts to design a better banking system are likely to fail. The government simply does not have the knowledge or expertise necessary to run a successful banking operation.
Ultimately, the left wing of the Democratic Party’s attempts to take over the banking system are misguided and dangerous. As conservative economist Thomas Sowell has noted, “The first lesson of economics is scarcity: there is never enough of anything to satisfy all those who want it.”
In the case of the banking system, the left wing’s attempts to take over the system through increased regulation and the creation of a government-run “public option” would only exacerbate scarcity by stifling competition, innovation, and economic growth.
As renowned conservative economist Friedrich Hayek once observed, “The market is not a place, a thing, or a collective entity. The market is a process, actuated by the interplay of the actions of the various individuals cooperating under the division of labor.”
In other words, the market is made up of individual actors who, through their own self-interest, work together to create a more efficient and innovative system. By allowing the free market to operate in the banking industry, we can create a system that is both more efficient and more responsive to the needs of consumers.
Furthermore, by allowing the free market to operate in the banking industry, we can ensure that the system remains solvent and financially stable. As conservative economist Thomas Sowell has noted, “The most basic question is not what is best, but who shall decide what is best.”
In other words, by allowing the free market to operate, we can ensure that market forces, rather than government bureaucrats, are the ones making decisions about which banks succeed or fail. This will ultimately lead to a more stable and sustainable banking system.
The left wing of the Democratic Party’s attempts to take over the banking system through increased regulation and the creation of a government-run “public option” are misguided and dangerous. Instead, we should trust in the power of the free market to drive innovation and competition in the banking industry. By doing so, we can ensure that the banking system remains solvent and financially stable, and that consumers are able to benefit from a more efficient and responsive system. As conservative economist Milton Friedman once said, “Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.” Let us hope that the ideas of the free market continue to lie around, so that we can avoid a crisis in the banking system and ensure a prosperous future for all Americans.
