How Do the Government and the Private Sector Intersect? How Should They?

How Do the Government and the Private Sector Intersect? How Should They?

At the onset of the lesson I did think that the government and the private sector intersected in some minimal ways but after participating in this week's readings I realize that they intersect in more ways that I knew.

The government and the private sector intersect in many ways but the ones that I found most interesting were firstly, the bank bailout. When private companies lent out money that they shouldn't have and made bets against the very loans that they had given out and then their companies were in dire financial trouble, they called our government and asked for a bail out. Faced with the probability of these banks the government "bailed " them out. As the authors of our text point out, the government "passed a $787 billion stimulus bill to ward off recession, guaranteed loans to restore confidence, and oversaw the reorganization and partial nationalization of the auto industry." (Draper 84) I personally don't think that this bail out was necessary or good on the large scale it was conducted. And, it would appear that the authors of our text agree. They point out that "the era of extreme market capitalism had led to an  embarrassing and inglorious crisis that forced the government to rescue the ailing company from its effects." (Draper 84) But, I do think that this is a prime example of the government and the private sector intersecting. Lastly, I do think that it is important to point out that the bank bailouts did not have the long-lasting positive effects that the government had hoped they would. The Denver Post recently reported that" The government's restrictions on pay at bailed-out banks had little lasting impact because officials soft-pedaled some issues and did much of their work out of the public's view. (Wagner)

Secondly, I also found the example of government and the private sector intersecting during World War I for the purpose of economic mobilization fascinating. "The federal government formed tripartite committees, composed of representatives from business, labor, and the government, to develop policy that would coordinate production for the war effort." (Draper 70) Although this intervention did not last long. "Although highly successful, the tripartite committees were disbanded at business's insistence when the war ended." (Draper 70) I believe that this is an excellent example of how the intersection of the government and private sector can accomplish something for the greater good of our country. It is for the same reason that I do not support the new health care bill. I don't believe that we should be required by the government to participate and pay for health care.

I like to think of myself as a purist of sorts, therefore, I do not believe in the intersection between the government and the private sector unless it is absolutely necessary. I think that this type of government interference can only lead to the government having more control over our lives than I am comfortable with. I think that we should keep government interference in our lives to a minimum if at all possible.

All of this makes me wonder the critical question: should banks be privatized? What are the pros and cons with regard to privatization?

Draper, Alan. The Politics of Power a Critical Introduction to American Government. New York: W.W. Norton & Company, Inc., 2011.

Wagner, Daniel. "Bailout pay curbs at banks short-lived, federal report says." The Denver Post, The Associated Press. February 11, 2011, 01:00:00 AM MST. http://www.denverpost.com/search/ci_17356529. 

Kurtzman, Daniel. "Bailout Money"About.com Guide. 2009 Universal Press Syndicate. http://politicalhumor.about.com/od/economy/ig/Bailout-Cartoons/Bailout-Money.04hd.htm.