Bennett Hypothesis: Financial Aid Increases Tuition

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Free market solutions have always worked.  Adam Smith in 1776 wrote about how efficient free markets are, and those theories remain the same today as they were back then.  As long as competition remains strong and monopolies are avoided, then the free market is perfect.  

Regulation, on the other hand, prevents competition as it prices out smaller firms that cannot handle the regulatory burden imposed on industry by governments.  One example is banking regulation.  The regulatory burden in the financial sector is so high that smaller banks cannot compete and we see very few new banking startups.  The banking industry welcomes heavy and expensive regulation because it prices out the competition.  There is a reason why banks no longer offer free checking or give out toasters as they used to when you opened an account (I'm talking about in general).  

Most people don't talk about this, but the mortgage meltdown and financial crisis were caused by government regulation.  The government imposed quotas on banks that 30% of their loan portfolios in 1993 should be for poor people, primarily to make housing more affordable.  Of course, this regulation caused home prices to rise, which wouldn't have increased that fast if there wasn't a regulatory quota.  By 2008 that quota was raised to 56%. Since poor people couldn't afford down payments on such expensive houses, and the banks still had a regulatory quota to satisfy, they then dropped their lending standards to allow zero down payments in the 2000's.  Had the laws of the free market remained, no bank would have had a substantial portfolio of sub-prime loans and more people would have been able to keep their homes.  

Everytime government interferes with free markets,  the citizens of that government get burned.  

Minimum wage laws are a form of regulation.