To intervene or not?

these 3 cars dare to anyhow park with no regard to safety

I spent my Friday with my old friends on a tiny 9-hole golf course in the middle of Johor. During dinner, an interesting series of exchanges ensued when I said US is moving towards more interventionist attitude after the free-market-created property busts crisis in 2007-2009.

My learned friend responded that it was interventionist attitude that had sparked off the crisis. The US government (can't remember led by which  president) came out with ideal cum ideal that encouraging home ownership is good for the country. That ideal led to the creation of Fannie May and Freddie Mac supporting home ownership with liberal home loans. Even people with no income "benefitted" from home ownership. This injection in funds into the property sector led to property price increase, initiating second mortgages and consequently the bubble burst. (Singapore too has a policy to encourage home ownership as part of its plan to encourage Singaporeans taking a stake in the nation's future.) The home ownership ideal may caused the crisis but did anyone count the gains from that same ideal eg. lower crime rate.)

I had not verified this line cause-and-effect proposed by my learned friend but it certainly sounds like something out from Freakonomics' philosophy.

We proceeded to discuss on Obama's victory in Court to ensure every American's right to be insured. I felt that it is good for the country not to saddle the government with more future costs by transferring the costs of servicing 30 millions Americans' healthcare to the collective mass of its citizens. We certainly do not wish US doing ala-IrishGreece.

My learned friend said Obama Care is bad for the economy as this interventionist move to force insurance on every American would raise the costs of hiring and retaining labour. American businesses hesitate in hiring more given the uncertainties.

My learned friend concluded the night's discussion that US would be in their glory if they allow free market to persist as per 1970s to 1990s. ( My quick retort was that US deficits and debt levels shot up higher during those years too. Based on my vague memory of US' statistics on this front.)

My final remark - In everything in life, there would be at least two sides to a story. But we always remember.. Every action, regardless of whether with good or bad intention, has a reaction.