US Smacked by the Invisible Hand

Americans are moving away from faith in free market
By Nick McMaster,  Newser Staff
Posted Jul 16, 2008 2:12 PM CDT
Treasury Secretary Henry Paulson is shown. Even the Bush administration is advocating more regulation of financial markets.   (AP Photo/Susan Walsh)
camera-icon View 2 more images

(Newser) – Are we losing confidence in market mechanisms? Years of unfettered free markets contributed to the current gloomy economic situation, and even the market-championing White House has lurched into government regulation of the financial world, the Los Angeles Times reports. With housing prices falling and oil prices rising, “the message that Americans are getting is that something went wrong with the markets and you got hurt," said one economist.

"With energy, it's the speculators. With housing, it's predatory lenders or crummy credit-rating agencies or stupid banks," the economist notes. "We're not ready to throw out markets altogether, but we want government to do something about the excess—what people may be demanding is New Deal lite."