I'm just curious- if you are one of the many who think that the American banking system should continue along with very little regulation or oversight, what do you think of the bail-out?
I mean, if you agree that a business should be able to chop up derivatives, sell them, and insure them, then shouldn't those institutions, no matter how large, be free to go down in flames?
I am not being entirely sarcastic here- I want to know if it is philosophically possible to be anti-regulation and pro-bail-out, and if it is, I really want to hear the argument.
That's all.
I feel very 70's saying this, but I believe in the freedom of choice. I think the problem is when people aren't honest about their products - and that happens everywhere from the dollar store to big American corporations and their money instruments. The regulation should come in at the disclosure level - what exactly are you selling? What are the risks associated? Paint the best and worse case scenarios, not just the best. If you can answer all those questions and still get customers breaking down doors for your product, good for you.
ReplyDeleteI agree that if a business is doing sketchy things that result in huge problems, they should not be bailed out by the gov't. The sad truth, as we saw in Daily Intel yesterday, is that the gov't needs these big businesses just as much as they need the bailout...I'm not familiar with economics and all that stuff, but I think the symbiotic relationship is so deep that the gov't can't just watch it go down in flames without further repercussions. It sucks, it's unfair, but I'll accept that when it has to be done to prevent further damages, it's life.
I will do my research before buying mutual funds, and I know my tolerance for losses are just as important as my desire to make money. If every company took on a bit more responsibility to tell people about their products, and every customer took on the onus of learning more about what they're buying into, then I believe in anti-regulation.
P.S. at the end of the day, i just don't think this was one side's fault, so i am skeptical of regulation. the FIs marketed crap that relied on risky models: their fault. the people who took on debt when they couldn't afford it, again banking on a risky model: their fault. regulation should happen on both sides in terms of helping people buy and sell better, but not in terms of limiting the types of products and types of choices we get as consumers.
ReplyDeleteVery reasonable responses. You could write for Obama. My main point here is that no one's greed or stupidity should be rewarded. Not the idiot who didn't see the balloon payment coming, nor the FI that worked solely for short-term gain by telling employees "Sign up as many people as possible for mortgages and you get a huge bonus".
ReplyDeleteIsn't there a (purportedly Chinese) saying "May you live in interesting times"? We sure as hell do!
It's only a Chinese saying because it came out of a fortune cookie at one point or another.
ReplyDelete