With the U.S. government planning to buy shares in banks, and having taken over Fannie Mae and Freddie Mac -- not to mention its involvement in insurer AIG -- is our nation heading toward socialism?
Some free-market purists have railed against our government's actions, which are meant to stabilize the crippled financial markets. But like with the New Deal many in the 1930s, some capitalists see the government's actions as a way to save our free-market system rather than replace.
After this whole financial mess is cleaned up, there is sure to be residual increased government involvement -- pronouned R-E-G-U-L-A-T-I-O-N -- in our financial markets for a long time. These things go in cycles. Look how long the New Deal-inspired programs took to finally disappear amid massive deregulation, only to return in a different form because of the current financial crisis.
After all, many blame deregulation for the financial debacle. (Read my take on this.)
It may be odd that we are using the trappings of socialism to save capitalism, but that seems to be exactly what is happening.
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