In the midst of this paralysis, the President was asked about the giant pay packages of Jamie Dimon, CEO of JP Morgan Chase & Co. ($17 mullion for 2009) and Lloyd Blankfein, CEO of Goldman Sachs ($9 million). "First of all, I know both those guys," Obama said. "They're very savvy businessmen. And I, like most of the American people, don't begrudge people success or wealth. That's part of the free market system."
Another aspect of this issue is the question of whether a free market system exists, or has ever existed in the United States in spite of all the talk. Many people (for example The Tea Party) don't seem to fully appreciate that the consensus amongst economists is that a true free market economy has never existed in America, because if it ever did, it would have been a failed economy that would have sent us to the bottom of the heap in short order. The term "free" sounds good, but in reality there are no "free" markets, the invisible hand of politics always comes into play.
Of course, restructuring mortgages may be an expedient policy to prevent the housing market from further tanking, but there's no way to make such a policy fair to the many people who passed on bubble home ownership because they were more conservative financially. Reconciling ethics and pragmatism in this case seem impossible. And to retain the myth of the free market, pragmatism has to lose.
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