Pure Premium

Connecting the Dots on Financial Reform

Posted in economics, liberty, politics, USSA by dingodonkey on January 22, 2010

Let’s take just one paragraph from a recent speech by Pres. Obama, beginning with the line:

Banks will no longer be allowed to own, invest, or sponsor hedge funds, private equity funds, or proprietary trading operations for their own profit, unrelated to serving their customers.

Forget for a second about whether this is a good regulation or not, because what’s way more interesting is the way our president described it.  Read that again, with some emphasis added:

Banks will no longer be allowed to own, invest, or sponsor hedge funds, private equity funds, or proprietary trading operations for their own profit, unrelated to serving their customers.

Hoo-boy.  So the problem, in Pres. Obama’s eyes, is not that there is some grave systemic risk posed by banks running “hedge funds, private equity funds, or proprietary trading operations” (many reasonable arguments that this is true have been advanced), but rather that it is wrong for them to do so unless they are acting on behalf of their customers (i.e. “the people”) instead of for their own profit (i.e. “themselves”).  I know a word to describe this way of thinking:

Collectivism: Personal or social orientation that emphasizes the good of the group, community, or society over and above individual gain.

Don’t buy that interpretation?  Well, here’s the president’s very next line, seeming to confirm it:

If financial firms want to trade for profit, that’s something they’re free to do.  Indeed, doing so — responsibly — is a good thing for the markets and the economy.

Who decides whether they’re responsible with their money?  Doesn’t this ring of “well if you want to do [insert discouraged action here], you’re free to do so, but….”?

This president could not wait to force public bailouts on even those banks that didn’t want them (he voted for it), and then refuse to allow them to repay as soon as they could (in his capacity as president).  Why would he do that?  So he can justify direct government control of the financial sector with statements like what he said next:

But these firms should not be allowed to run these hedge funds and private equities funds while running a bank backed by the American people.

This is effective nationalization, and nothing less.

Advertisements