Stuck in the Middle Ages asked:


Would capitalism collapse if we (the taxpayers) did not bail out companies (and, in the process, extremely wealthy business people) in the financial sector that took too many risks? Or would capitalism prosper, making the more conservative companies and businesspeople able to both weather the storm and purchase the assets of the companies that couldn’t? Wouldn’t other companies come in to take advantage of the situation (as would occur in any other situation)? Wouldn’t there be opportunities to pick up dying companies’ customers?

Also, how does the government determine whom to “save”? Why Bear Stearns and not Lehman? Why Freddie and Fannie and AIG but not Washington Mutual?

Further, do you believe that a taxpayer-supported entity (like the former Resolution Trust Corporation) will make the everyday people feel more comfortable? I assume that’s not really a concern. It’s the people with big money that are the focal point.

Ultimately, how is this a free market, limited government-interference economy?