Essay About Financial Catastrophe And Involvement Of Government

Involvement of Government and Business
The involvement of government and business institutions in the diagnosis and solution of societal problems has remained in existence for many eras, although the concept has gained more supports in the international development arena in modern times.The relationship between government and business is complex, with both positive and negative qualities. This perception of the public good deviation is dependent on one’s philosophy. This creates the appreciation of the phrase even further multifaceted. Consequently, an accurate understanding of the relationship that exists between the two requires an investigation of the three theories of the political economy, the free market economy, socialism and mixed economy. When viewing the economic system we live within, one must first analyze, “The three most important economists were Adam Smith, Karl Marx, and John Maynard Keynes (pronounced canes). Each was a highly original thinker who developed economic theories that were put into practice and affected the worlds economies for generations” (“Three Economists and Their Theories”).Business growth and development are fundamental to economic improvement. In certain instances, government assistance is necessary to better stabilize the operation of corporations. Like the government, corporations practice unwell decisions, therefore a partnership is required between both entities. Many of the citizens of the United States depend on the functions of sizeable corporations, specifically the automotive industry. In 2010 Industry Week released that, “The U.S. government, which had long held a hands-off approach to the automotive industry, became a major stakeholder last year after loaning GM and Chrysler more than $50 billion to keep them afloat during the economic crisis and finance their restructuring under bankruptcy protection” (Oberman). Countless manufactures depend on one another, and within these corporations are the citizens of the United States. Keep in mind that these citizens elect officials to represent them in times of need. Had the federal government not stepped in to aid the automotive industry, the economy may have transgressed further into economic depression. The financial “bail out” was looked upon by many as undesirable. This series of events was contingent upon where many stood politically.The American Prospect noted that, “The jobs were saved, the economy was helped, and the government gets repaid ahead of schedule. GM too is earning healthy profits again, allowing the government to divest itself of its GM stock. So: everybody wins” (“The Unpopular, Successful Auto Bailout”). The involvement of the government in business affairs is crucial, so that yet again businesses can thrive, which promotes the citizens of the United States. Had the “bail out” not occurred, a financial catastrophe may have ensued. When financial catastrophes occur, many citizens question of these created institutions truly work. Citizens no longer take possessions for granted as previously believed.