No more government intervention in the financial industry.
In recent years, scandals about the financial industry have made many headlines involving corruption, greed, and fraud. It’s natural to place blame on the corporations and trust that more government power can prevent further corruption. However, more government intervention is not necessary to prevent corporate corruption. Government regulation creating more red tape does little to thwart unethical corporate behavior. Financial scandals are far less prevalent than portrayed. Under free market conditions, individuals that commit fraud are punished and companies can go bankrupt. The additional costs of regulations hinder competition, and financial industry is making efforts on its own to be more socially responsible.
Corporate scandals have been around since the beginning of the modern economy. Recently the media has brought much attention to the downfall of Enron, financial crisis of 2008, Mather Steward and Bernie Madoff. But is corporate scandal really that widespread? Of all the publicly traded corporations in the world, the percentage involved in fraud and unethical behavior is very small. It would not be productive to punish all corporations for the wrong doings of a minority. The theory of availability heuristics explains why there is an overestimation of the number of financial firms engaged in unethical behavior. People will tend to make decisions and draw conclusions based on the information that is readily available for recall (Sunstein, 2003). The media bombardment of the few financial firms that act unethically will be more easily recalled than those companies that act ethically. The many financial firms that act ethically do not draw national media attention.
While arguing for more government intervention and regulation, many are quick to blame capitalism and free markets as the scapegoat for the financial crisis in...