LAISSEZ-FAIRE CAPITALISM


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While it cannot be denied that capitalism creates wealth, it also cannot be denied that capitalism has the capability to decimate wealth as well. True capitalism in essence is the free trade of individuals or companies on an open market and all parties become the beneficiaries of financial gain. So in essence capitalism is not a bad thing, the reasoning behind it is not bad. Alan Greenspan was appointed Chairman of the Federal Reserve by President Ronald Reagan, he was a staunch believer of letting the free market go as and was against restrictions on the market. Mr. Greenspan was re appointed by presidents George H.W. Bush, Bill Clinton, and George W. Bush. Mr. Greenspan was viewed as the infallible architect of U.S. prosperity.

He was against market regulation and encouraged the usage of adjustable rate mortgage loans (ARM) by home buyers. It is no underestimation to say that when Alan Greenspan spoke, Wall Street listened; as did bankers, investors, politicians, and economists throughout the world. He was the maestro, over time gaining a reputation that was legendary. His defense of laissez-faire free market capitalism was what kept the economic engine of the country running at full speed.




While Mr.Greenspan certainly ensured the economy was humming along, the greatest financial crisis since The Great Depression was coming. When it hit, Mr. Greenspan had to face the tough conclusion that letting a market do what it feels simply because that is what the market wants is not the right way to go. It was a hard and humbling lesson for Mr. Greenspan