From time to time, the Guardian, to its credit, likes to shake up its leftist readership with a dose of sanity. Here is a fine example.
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Great article on free markets and banking – in the Guardian!September 15th, 2009 |
 11 comments to Great article on free markets and banking – in the Guardian! |
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More in the same vein here:
http://www.cobdencentre.org/tag/insight/
Johnathan,
I admit to being stunned. It is rare enough to hear something so sensible in the MSM but he states it with such clarity and in that particular venue. It is possible he may even open some eyes among the general public.
I bookmarked it.
The comments, however, are depressingly predictable. It would appear a large proportion of the commenters saw the word “deregulate” and didn’t read any further.
Sam, the problem is that for the drones of the mindless statist mindset, “deregulate” is a boo word, such as “nuclear”, “American” or for that matter, “freedom”.
All sorts of views find their way into Comment is Free, but if one writes for it, one does so aware that it is not The Guardian. (Not least they don’t pay very much. Comment is Almost Free.)
The paper itself and its readers remain undisturbed by variant viewpoints.
I missed that Guy – thank you for pointing it out.
Still even the on line article is better than nothing. I suppose it is like apologies in the “mainstream” media in the United States.
Some person in the Washington Post (or whatever) will claim that Glenn Beck eats babies or Bill O’Reilly wants to gas the Jews – and when it pointed out that this is not true the newspaper will apologize.
And when the victim of the smear says “but I can not find the apology anywhere in the newspaper” the reply is “it is in the on line version silly – you really are behind the times”.
And, actually, it is true that such an apology is better than nothing at all.
In this case the Guardian is not that with a person – it is doing it with CONCEPTS.
For years they have claimed we have a “free market economy” or “an ultra free market economy” and they have recently claimed that the crises was caused by “deregulation”.
Now when anyone says “but we do not have a free market economy” or “there has been no recent deregulation – or any real deregulation at all in the proper sense” they can (quite truthfully) reply that “we allowed someone to say that in the on line version”.
It should not be knocked – after all something like the New York Times (true to its mission of being the new Pravda) would not even allow truth to be told in its on line version.
The odd thing about the collapse of Lehman Brothers (about which the BBC and so on have beating their chest about recently) was that the choice not to bail it out was the only correct judgement the power-that-be have made in the recent crises.
Certainly their motives were totally vile (one should expect that) – Lehman Brothers was the great rival of Goldman Sachs and most of the key political power people were connected to Goldman Sachs so LEHMAN-MUST-DIE.
However, the choice not to bail it out was the correct one – Lehman’s was a rotten company (more concerned with “diveristy policy” in race, gender and sexual orientation than it was with good business practice – and, no, I am not making that up). And it bankruptcy did not destroy value – on the contrary only the rotten bits of Lehman’s closed down, the bits that had value (even Lehman’s had some good employees and some bits of the business with value) were sold off to other people.
This is the policy that should have been followed with AIG and, yes, with Fannie Mae and Freddie Mac also.
Wells Fargo may be a mega fractional reserve bank – quick to spend good money on worthless buys (of bankrupt W. bank) and a bank who accepted TARP money (although that was not really voluntary for the big banks – so who knows what they really would have done had they been free to choose) but at least the head of Wells Fargo is on record long maintaining that the de facto government support for Fannie Mae and Freddie Mac (the bastard children of the government) would end in tears.
So it is not just head banging “extremists” like me – it is one of the largest banks in the United States who admit, part of, the truth.
Guy – indeed. I was astonished to read an article on CiF the other day by the senior partner of one of the biggest offshore law firms, defending the financial industry in the Cayman Islands. You can imagine the comments thread…
I wish those Guardian commenters would make their mind up – they vacillate between: i) the problem is that the finance sector was already tightly regulated and it failed (conclusion: more regulation / enforcement is needed) or ii) the problem is that the finance sector was not regulated enough (conclusion: more regulation / enforcement is needed).
Both reasons are given as justifications, yet both can’t be true.
It reminds me of reading Marxist based social science and economics papers – the usage of “capitalism” in the writing is assumed, and that assumed meaning (which the reader is supposed to infer somehow) just happens to support the writer’s conclusion – this is despite it magically meaning different, often contradictory, things from one paper to the next.
When they finally get around to writing the real histories of what happened, I suspect we’ll see a lot of stuff about Paulson wanting Lehman’s to go down and I suspect it’s completely true.
The reason why he panicked then and started bailing everything out in sight was probably more to do with several large Money Market funds suspending operations because they were getting runs on them due to the Lehman’s collapse.
When that started happening I suspect that Paulson had a stiff case of brown trousers and started behaving like Clive Dunne in Dad’s Army.
The idea of allowing insider trading intrigued me though. I’m curious how you’d run that and maintain a fiduciary duty to shareholders, but it could help.
Daveon has a good civil law point. If a director of a public company acts to buy or sell shares (or advise others to do so) in such a way as to inflict a financial loss on other share holders – and he does so on the basis of factual information he does not share with the other share holders – then there may be a case for civil damages.
This does not justify making insider trading a crime – but it does mean that directors (or other employees of the company with a duty to the shareholder) should be open to being sued.