RS: Regulators Mount Up

This blog post is my response to “Commanding Heights, The Battle for the World Economy”, released by PBS.

This documentary was really interesting, especially when it came up how after World War II, the government tried to control the prices of all goods, causing huge amounts of inflation in Germany. When the government ruled price control was taken away, the economy flourished. According to the video, “overnight the black market disappeared. People stopped hoarding, and goods not seen for 10 years went on sale”. How great is that? What a huge turnaround from where goods were being traded for cigarettes and booze to the economy actually making its way back up.

Still, even after seeing Germany’s success, most countries wanted to have the government set up their economy. And while some flourished, others didn’t. The situation with Germany after the war is not the only occurrence where the lack of government involvement helped a diminishing economy. During the 1920’s in the United States, there was a recession, but the government wasn’t involved and the problem rectified itself within the year.

Yet, the government still wants to involve itself in the economy even after seeing how it is unecessary. In the past few years, there has been the issue with the government "bailing out" banks which needed assistance. Who knows what would have happened if the banks just went thru the normal life cycle. If they had gone down, who knows where the economy would have been if there wasn't an intervention. Where would we be now? We'll never know.