|Type of paper:||Essay|
|Categories:||United States Economics Finance Government|
In the United States, the government creates, curates and maintains the free markets. The government is, therefore, responsible for financial regulation and intervention in the free market. Even though many people assume that the government wrecks the freedom and balance in the free market, it creates and maintains the rules that govern the free markets, and without its intervention in the financial regulation, the free market cannot exist.
An excellent example of a situation that indicates the reason for the government financial regulation and intervention is the France free market situation. The government in France has left the big business in the free market to take control. As a result, they have formed cartels, forming local monopolies, thus, there is no competition in the market. The government is even unable to push the suppliers to supply their products at fair prices. Consequently, the retail price of the products in France is about 20% higher than that in Germany, even though the Value Added Tax (VAT) in Germany is higher than that in France. This explains the reason the government needs to regulate and intervene the financial laws in the free market.
The reason many people do not want financial regulation and government intervention in the free market is that they imagine that the government regulation caused the financial crisis in the USA. Contrary, it is the government deregulation that caused the financial crisis. Meaning that, should the government have regulated the financial aspect in the free market, the crisis probably would not have occurred. Since the success of any free market depends on how they are structured, and the government structures the free markets, then the government has the right to regulate and intervene in the financial aspect of the free market to ensure that they operate in accordance with the structured laws.
Another aspect of the market that suggests the reason the government should exercise financial regulation and intervention in the free market is the crashing world oil prices. In fact, the oil industry lobby has asked for help from the government. The Unite union is blaming the government for failing to intervene in the oil industry lobby thus, causing the crash of the prices. More so, the government neglect to invest in the industry has resulted in the loss of jobs and reduced tax revenues. The Unite union is requesting the government to intervene in the oil industry free market through investment in the infrastructure. This would be advantageous as the prices are currently low, and the government would enjoy profits when the prices resume to normal.
In summary, the government should ensure financial regulation and intervention in the free market since it creates the market structures and rules that regulate the free market. Besides financial regulation of the free market, the government can intervene by investing in the free market to ensure job creation and increased collection of revenue. Failure of the government to intervene in the financial regulation and intervention in the free market has resulted in many adverse effects in different aspects of the economy. For instance, the failure of the France government to intervene in the free market has led to increased prices for the retail products. Also, it has resulted in the crash of the world oil prices in the UK.
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Essay Example on Free Market, Financial Regulation, Government Intervention. (2017, Sep 05). Retrieved from https://speedypaper.com/essays/free-market-financial-regulation-government-intervention
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