Monday, March 31, 2008

Typical Reaction to Financial "Crisis"

It wasn't a question of "if", but "when." I knew that the problems with the sub-prime would result in typical government reaction in the extreme. There is no doubt that there was some poor decision making in the home financing market place and the companies that are guilty of such are taking a pounding today. The market place is naturally punishing these companies. Some are going bankrupt, others are being acquired by other mortgage companies, others still are voluntarily making significant reforms.

This, of course, isn't enough for the government. The government is demanding more regulations, some of which will make it difficult (if not impossible) for many people to ever be able to get a dream home. They are demanding another agency to provide more oversight, leading to more bureaucracy and cost, but not necessarily to better systems. It is typical government over reaction that leads to punishing, but not effective government. The kind of "reforms" that hurt the victims more than help. The type of programs that only hinder economic growth and prosperity.

I wish the government took more of a medical profession view of problems. Often, when a person is sick, the last thing a doctor wants to do is intervene because the cure is some times worse than the illness. Instead, the advise is "let it run its course." Letting the current situation run its course would allow government to take action after things have settled and then it would have some idea what steps need to be taken. Doing it now, is typical reaction, the kind known for causing damage.

For a copy of the free report, "Why Your Marketing Isn't Working," email Info@HoustonBusinessShow.com and put "marketing" in the subject line.

Kevin Price is Host of the Houston Business Show (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at HoustonBusinessShow.com. Visit the archive of past shows here.

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Anonymous Redstate Rules said...

It is like putting a fire out with gasoline.

8:25 PM  

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