im speaking in general terms and am by NO WAY saying the American model is very good. I am saying however that the american model is the reason you own a car and have a dishwasher.
You are once again confusing regulation and corporate interests. The american government fucked up in the bush administration, thats no secret. And as a result they have a nice massive debt they need to pay off, and good for them because they elected the bastard, twice. If those regulations have been in place like they had been with Canada then the subprime crisis would be less of a worry. Bad government is not no government. Do not confuse me with the shear stupidity of a bush voter.
I never said you cant regulate big business. My argument is simply that you must let them grow as much as they can. Small business and large businesses need to be treated equally with exception of some taxes for smaller companies. The tax issue is to help encourage the growth of these companies so they can get to a point to pay fair taxes. Again, political issue.
Democracy & free speech is a principal used all over the world now. many democratic free nations are poor as hell so thats proof that democracy alone doesnt make a country rich, it just gets the people involved.
I do read papers and watch TV. And i can tell you that the government intervention in recent economic troubles is a direct consequence of the government not putting obvious legislation in place. Stupid republican government is not fair regulation. Fair regulation is protecting consumers and safety. Not passing good hedge fund, loan, ect. legislation or safeguards is your own dumb governments faults. Everyone knew what the banks where doing long before it all crashed on them.
As you put it, B would be the correct answer. However with B you would have such little economy to begin with that people would go hungry.
I had a hear of a good example of how important AIG was to the economy. They insured things like oil rigs, airline planes, ect. They lowered the risk for these companies so they could actually go ahead and be companies. because of this, airlines and oil companies have capacity to do things they otherwise wouldn't. Such assets or risk taking would never have existed. The worse case sinario is far better then the best case sinario without this.
But i would like to assert that AIG messed up big, and everyone knew AIG was messing up. Stupid government is not an excuse for super-regulation.