Government and markets
While presenting his speech, Eliot Spitzer showcases the role that the government can play in regulating markets. From the speech, Eliot asserted that the United States government missed a chance to ensure that the financial markets had a firmer foundation, and future financial meltdowns could be avoided. From the financial meltdown that occurred in 2008, the government should have embraced a rational policy in dealing with the financial problems.
According to Eliot, the effort that was put in by the congress to ensure that there was a great improvement in how the market was regulated did not seem to have had any significant results in the financial industry. The inertia that was as a result of changes that were made by the congress in regard to the financial industry has left the industry or the economy on the precipice. Additionally, the economy is at risk of having similar downturns in the future while at the same time maintaining a level of income inequality that is dangerous.
The second reason that Spitzer provided was that all the normal economic actions would in some way produce externalities that were negative. This included costs incurred by people who were not responsible for the action that had been created. The example that Spitzer used in this instance is the population that is created by power plants. The power created from one power plant can move to different state lines thereby creating economic and health costs for the different states that are far from the area or the source of the power being created. It is only the government that is in a position to guarantee that these negative externalities can be dealt with and that it is only the government that can try to impose behavior modification, especially on the economic actors.
The third reason that Spitzer provided in this instance is that there are certain core values that are purely unbridled market behavior cannot respond to. In order to response to such market conditions, Spitzer used discrimination laws to elaborate why government interventions were necessary.
Discussion of concepts
There are various concepts that Spitzer discussed in his speech that I agree with. The government has a huge role to ensure that there is a fair and competitive market. The involvement of the government should be on a regulatory basis but should not interfere with market conditions that seem to favor some particular entities (Spitzer, 2011). While he was still an attorney, Spitzer dealt with many cases that involved corrupt officials. This means that these people were trying to manipulate some market conditions to their benefit. Had these corrupt individuals been successful, then it would be the whole economy that would be in ruins. What I also agree with the concepts discussed by Spitzer is that there should be a great deal of integrity that should be expected of the people managing the economy of the United States. People should be able to get a great deal of integrity especially from the officials that they elect to the office. There is a need to reinvigorate the shareholder activism so that there are no few individuals who “own” Wall street while we as people think that we all own wall street. The more a few individuals are able to control large sums of money, the more there would be an increase in the income inequality that people would get. It is the people who are elected to the office who seems to have been successful in whitewashing the economic problems that the United States faces. It is, however, their responsibility to ensure that some bodies that deal with the facial markets are strengthened (Masters, 2013). It is only the government that can ensure that the necessary regulations are used in the market. Imposing the regulations by some set of rules would ensure that there is a fair market and that everyone could enter or leave the market as there are no corrupt individuals who may want to rig the market for their own financial gains. Additionally, it is only the government that can come up with the required punishments especially in instances where there have been some irregularities in the market that need to be ironed out. Overly, the speech that was provided by Spitzer changes the manner in which we as people need to look at the role that the government plays in the market. People should not be overly defensive since there are options that have not been fully explored.
References
Spitzer, E. (2011). Government's place in the market. Cambridge, Mass: MIT Press.
Masters, B. A. (2013). Spoiling for a fight: The rise of eliot spitzer. New York: Henry Holt and Company.
Goldmann, P. (2013). Fraud in the markets: Why it happens and how to fight it. Hoboken, N.J: Wiley.
