I will be pretentious - I do know - markets are the best.
Yeah, I'd like to believe it as well.. but do we really have a "market" anymore, or merely computerized program trading and market destruction via various manipulative practices?
We see the Naked Short Selling, which is nothing less than counterfeiting of shares, destroying our entrepreneurial corporations. And on the long side, we see creation of toxic securitized assets backed by fraudulent credit rating schemes.
The financial surety markets, where risk is assessed and mitigated, are in tatters and unwilling to insure any deals. We've seen unrivaled fraud and predatory lending in the mortgage origination industry..
Those are the results of "facilitated markets" which operated while the regulatory officials slept at their desks and did little to interfere (except to backstop their deals with government guarantees).
Bob.. an old political science professor of mine once asked us.. "What's the difference between Capitalism and Communism?"..
We all tried to give him the pat answers.. Dialectic Materialism.. Proletarian struggle.. etc.. But then he held up his hand and stopped us.. and said,
"The difference between Capitalism and Communism is that, under Capitalism, man exploits man.. Under Communism, it's the other way around"..
I have NEVER forgotten that. And hence my view that economics MUST SERVE the majority of humanity, not the other way around.
Hawk |
