Government Interference in the Free Market

This has gone under the radar for far too long - our federal government now has an equity interest in 371 banks in the United States!  That means our government is part owner of the banks, and in some cases the majority owner of the banks.  In a free market, where private banks compete and affect our economy in a myriad of ways, it's just good common sense that we should expect our government not to own any of these banks, either in a minority or majority capacity.

Here are a couple of studies that show that government ownership of banks is associated with slower subsequent development of the financial system, lower economic growth, and, in particular, lower growth of productivity.  See the following studies that support how bad an idea it is for the government to own and meddle in the banking system like this:

http://www.economics.harvard.edu/faculty/shleifer/files/GovtOwnershipBanks.pdf

http://www.sciencedirect.com/science/article/pii/S1042957311000271

In one instance, the government owns a 74% stake in a bank - Ally Financial, Inc., the former financing arm for General Motors.  That means the government basically runs the company.  And this is no small bank - over 14,000 employees; annual net profits exceeding $1 billion; and $172 billion in assets.

Our federal government is intended to ensure that the free market remains free, setting up a basic framework in which companies may compete and make profits.  It is not proper for our government to become an owner of these private companies - consider the conflict of interest when the entity making the rules owns some of the companies that play by those rules.

This is just another sign that our government is far too large and out of control, and if it isn't reined in soon, we should stop considering it a free market.  More and more, our free market resembles a government run market, and both companies and consumers will continue to suffer.  Political power should not dictate how the free market operates - fair competition between private institutions is how the free market is designed to work, and how it operates most efficiently to everyone's benefit.  The only one who benefits from a government run marketplace is the government, and the more government there is, the fewer freedoms we will have.