by J.D. Kay

Created on: March 24, 2009   Last Updated: March 09, 2011

The most interesting part of the question should the Federal Government intervene to save big corporations from bankruptcy, comes in the form of another question:  if the government wanted to take money from the companies because they are making too much, would that be fair?  Most economists would say no and argue that Government has no business in a free market society.  Following the economists thoughts, the Federal Government should not intervene and save big companies from bankruptcy.

To truly understand the reasoning behind why anyone would say no to saving a big company from filing bankruptcy, we first need to look at what a free market economy (such as the one in the United States) really is. A free market economy is one that is free from government intervention and any type of regulation. Most people believe that the U.S. economy is a free market, not totally the case. Almost every corporation in the country is against any type of regulation because these regulations hinder a company’s ability to maximize their profits. However, these regulations keep companies from creating monopolies, charging unnecessary fees, and help to reduce fraudulent practices.

Instead of Government intervention, I think our country should remove all regulations and let the free market self regulate. If consumers don’t want to buy companies products for any reason, they don’t have to.  Consumer protection is not the problem of the Government that falls on the ethical ability of the companies selling the products. Allow for companies, such as the large banks that used predatory lending, alternative solutions, and in some cases consumer deception, to increase profits to file bankruptcy. At that point I would assume those that so strongly oppose government intervention may decide differently.

So what happens if these big corporations fail? Aren't consumers the losers? If the big corporations were allowed to fail other companies would be forced to become more honest, responsible, and consumer focused, something large corporations have turned away from in favor of increased profits over the past several years. Also, this would cause the leaders of these companies to be creative, customer service motivated and, for once in a very long time, cause them to be responsible for their own actions.

To be fair to the Executives of these companies, they are not completely to blame; let's face it, consumers and citizens of the U.S. sit back and let it happen, so why not take advantage of it? Everyone else does.

As consumers are being pushed farther and farther to the back of the "service" line, Executives are walking away with millions of dollars, even when a company fails due to their negligence. Ask yourself this question, would you still be employed if your company failed because you led it into the ground? No you wouldn’t, you would have to answer for your failure, so should they.

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