Financial institutions like Investment Banks, and Insurance Companies, are interested in profit through the system of Capitalism. President Obama stated recently, he has no desire to halt companies from making profits from Capitalism. However, the very mention of stiffer "Regulations" being imposed on certain financial institutions has been spun by the right as "Socialism" or "Nationalism". Is this a fair characterization?
In the wake of Enron, Worldcom, and most recently Bernard Madoff, to name a few, why wouldn't all of America demand tighter regulations to guard against greed and the lost of life savings of working class Americans?
Even the first bailout package seemed to backfire, resulting in more corporate greed and lack of financial accountability. Stiffer regulation does not mean Nationalism, stiffer regulations translates to financial accountability, transparency and security against financial terrorism. Capitalism above the table is better than Capitalism under the table.
Thursday, March 12, 2009
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2 comments:
o.k.
It is not Nationalism to have regulations on Financial Institutions. It is Nationalism for the Government to take over financial institutions, which is what our current President (and Treasury Secretary) want to do. Their thinking is rooted in the thought that large financial institutions can’t be allowed to fail. For large insurance companies and other non-bank entities, failure and reorganization through bankruptcy court is a perfectly normal part of Capitalism. Companies with poor management or bad business plans should go out of business. As for stiffer regulations, the financial marketplace has plenty of regulations, our problem was the regulators. The SEC was warned about Bernie Madoff on multiple occasions and did nothing. The SEC also was aware of the mortgage securities market, which they had the power to intervene in long before all of this worthless paper was traded. What we are really witnessing is a failure of Government to enforce the regulations already on its books. That same Government is using that failure to increase it’s power over the private sector.
MJE
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