Obama Wages War Against Speculation and Interest
Published in La Cronica de Hoy
(Mexico) on 22 January 2010
by Julio Brito A. (link to original)
United States President Barack Obama is really angry with Wall Street, and especially with the banks. He complained, among other things, about the brutally high compensation for executives. This contrasts starkly with the poverty of their businesses, which are practically in bankruptcy. He has also noted the excesses they allowed themselves in creating toxic securities, which at the end of the day caused a recession. This recession will take Mexico at least three years to surmount.
Suddenly, he stands in the shoes of the taxpayers who gave, and will give in the next few years, billions of dollars to reduce government debt that threatens to spin out of control. In his visceral anger, President Obama is launching a series of measures intended to go beyond regulation and enter into the world of planning. Obama and the Democrats want banks that are small and easily controlled in all their operations to make sure that history does not repeat itself with a planned system that is far from the capitalist philosophy. The strange thing is that Obama and his party were the ones who fed and created this monster called Wall Street. They were the ones who approved the disproportionate bailouts in the interest of fighting a recession, which threatened to be the mother of all crises.
As always, the Republicans refused to defend or rescue big corporations, because under the capitalist ideal any business that is badly managed should be excluded from the market by its own mechanism. In saving the banks, one should understand that one is saving thousands of bad calculations and risks.
What is excessive is that Obama says that he will avoid speculation, when this is the fuel that every stock market runs on. Those who put up their money are betting that such and such a thing might occur. If they guess right they will have their prize, if they lose, they must hand over the goods. Trying to stop this is going against nature.
The reality is that in a few days Obama will understand that he cannot play with the markets and much less do it in the style of Hugo Chavez, president of Venezuela, looking to create an imaginary world. The market plays by a different set of rules and we regret that some leaders have imposed criteria related to religion or “social justice,” when in reality, what is needed is to judge transactions and risks from within and with an iron hand.
Suddenly, he stands in the shoes of the taxpayers who gave, and will give in the next few years, billions of dollars to reduce government debt that threatens to spin out of control. In his visceral anger, President Obama is launching a series of measures intended to go beyond regulation and enter into the world of planning. Obama and the Democrats want banks that are small and easily controlled in all their operations to make sure that history does not repeat itself with a planned system that is far from the capitalist philosophy. The strange thing is that Obama and his party were the ones who fed and created this monster called Wall Street. They were the ones who approved the disproportionate bailouts in the interest of fighting a recession, which threatened to be the mother of all crises.
As always, the Republicans refused to defend or rescue big corporations, because under the capitalist ideal any business that is badly managed should be excluded from the market by its own mechanism. In saving the banks, one should understand that one is saving thousands of bad calculations and risks.
What is excessive is that Obama says that he will avoid speculation, when this is the fuel that every stock market runs on. Those who put up their money are betting that such and such a thing might occur. If they guess right they will have their prize, if they lose, they must hand over the goods. Trying to stop this is going against nature.
The reality is that in a few days Obama will understand that he cannot play with the markets and much less do it in the style of Hugo Chavez, president of Venezuela, looking to create an imaginary world. The market plays by a different set of rules and we regret that some leaders have imposed criteria related to religion or “social justice,” when in reality, what is needed is to judge transactions and risks from within and with an iron hand.
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