The mortgage crisis says hi. The problem with free-market ideologies isn't that the market won't adjust to consumer need, it's that it causes considerable pain in doing so and will only provide a counterbalance if there's a monetary incentive.
Free market capitalism is, at it's core, evolution. It leads to amazing responsiveness, complexity, and, arguably, beauty. It also has made 99.99% of all species that have ever existed extinct. There are homeostatic forces that keep the aggregate more or less balanced, but evolution isn't good for the species involved, it simply is true.
There's no mechanism in non-random selection with random mutation to prevent Asian Carp from taking over the Great Lakes, Pine Beetles from destroying forests in BC, invasive kelp in the Mediterranean, etc. Similarly, the free market has no mechanism to prevent credit fraud, market collapse, rampant speculation, or any of the other mechanisms of economic calamity we've seen. Your "coercive" government regulation plays the same role that we play in attempting to prevent environmental disasters through the spread of invasive species. Would a global ecosystem entirely managed by direct human intervention be desirable? No. Would be be well-advised to ignore threats to ecosystems and "let nature take its course"? Of course not.
Free market supremacists seem to fail to see the forest for the trees when arguing against regulations. The Free Market isn't an end unto itself, it's an effective means to the ultimate end, which is the improvement of the human condition. It isn't the only means, and it isn't the most effective means in all cases. The role of effective, well-considered government regulation is to harness the benefits of the free market while mitigating its risks. This can only be described as a Good Thing.
Rather than rail against all regulation, we should be trying to ensure that the regulations that are created are wise and impartial. Our energies would be much better spent ensuring that legislative bodies are free from undue influence than by trying to remove their power to regulate in the first case.
The Community Reinvestment Act seems to be a pretty likely stimulus for the mortgage crisis - incentivizing "anti-racist" behavior rather than good lending practices. Worse yet, the "considerable pain" you're trying to avoid gets worse over time -- as central bankers reduce interest rates (read: print money) to jack up growth until it gets too fast then pull money from the market (read: increase interest rates) to slow down a "bubble", the yo-yo effect amplifies until pop.
Pine beetles in BC are an interesting point, as it seems like it is precisely the lack of ownership over valuable forest land that is preventing the type of extensive research we would need to protect that resource. While research outcomes are entirely uncertain, it seems that ownership and the forecast loss of value is a pretty solid motivator for solving problems.
Free market capitalism is, at it's core, evolution. It leads to amazing responsiveness, complexity, and, arguably, beauty. It also has made 99.99% of all species that have ever existed extinct. There are homeostatic forces that keep the aggregate more or less balanced, but evolution isn't good for the species involved, it simply is true.
There's no mechanism in non-random selection with random mutation to prevent Asian Carp from taking over the Great Lakes, Pine Beetles from destroying forests in BC, invasive kelp in the Mediterranean, etc. Similarly, the free market has no mechanism to prevent credit fraud, market collapse, rampant speculation, or any of the other mechanisms of economic calamity we've seen. Your "coercive" government regulation plays the same role that we play in attempting to prevent environmental disasters through the spread of invasive species. Would a global ecosystem entirely managed by direct human intervention be desirable? No. Would be be well-advised to ignore threats to ecosystems and "let nature take its course"? Of course not.
Free market supremacists seem to fail to see the forest for the trees when arguing against regulations. The Free Market isn't an end unto itself, it's an effective means to the ultimate end, which is the improvement of the human condition. It isn't the only means, and it isn't the most effective means in all cases. The role of effective, well-considered government regulation is to harness the benefits of the free market while mitigating its risks. This can only be described as a Good Thing.
Rather than rail against all regulation, we should be trying to ensure that the regulations that are created are wise and impartial. Our energies would be much better spent ensuring that legislative bodies are free from undue influence than by trying to remove their power to regulate in the first case.