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Taking Responsibility

In an interview in the Weekend edition of The Wall Street Journal, Anna Schwartz, who co-authored with Milton Friedman, A Monetary History of the United States (1963),  shared some refreshing insights on the recent financial market turbulence.  One gem in particular was her observation:

"firms that made wrong decisions should fail," she says bluntly. "You shouldn't rescue them. And once that's established as a principle, I think the market recognizes that it makes sense. Everything works much better when wrong decisions are punished and good decisions make you rich." The trouble is, "that's not the way the world has been going in recent years."

Advocating the reliance on principles of responsibility and economic common sense she chastises the current (lack of) leadership from our government in both the Treasury and Federal Reserve.  I concur with her and suggest that the government should step back and let Banks take responsibility for their own actions - and let the weak ones fail.



Comments

( 2 comments — Leave a comment )
john_j_enright
Oct. 19th, 2008 01:28 am (UTC)
"firms that made wrong decisions should fail"

Bravo. Being "pro-business" shouldn't mean being in favor of bailing out failing businesses!
jwhend49
Oct. 19th, 2008 01:33 am (UTC)
How true! Capitalists should shun corporate welfare.
( 2 comments — Leave a comment )

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