Paul—you’ve really gotten to the heart of the matter today. Free markets are GREAT, as long as we’re all winning. But times like now can turn even the rich guy from Monopoly into a hardened socialist.
(You know, the guy with the monocle.) Let me first say, I am a hardened free trader, and have been for a long, long time. I think most of the yammering about the evils of free trade and globalization is ill-considered, patronizing slop. Ultimately, again, if properly regulated against gross abuse, there is nothing like the efficiency of greed and free market capitalism to get the most to the most. It’s not always pretty, but it’s all we’ve got.
And if you want to talk about inequity between first world and third world, don’t blame free trade, blame the LACK of it and the mind-bending protectionism that is hypocritically practiced by the West. It is a sham of a system that protects inefficiencies and prevents humanity from optimizing its potential. And all of THAT brings to mind the absurd, infuriating corporate welfare that says that certain companies are too big to fail, no matter how incompetently or filthily driven by raw greed they are.
So I am with you, and I am with the angry, angry unwashed masses on this one. SCREW those guys. If it’s capitalism for the homeless guy in the street, then CERTAINLY it should be capitalism for the silver-spoon-coddled, overreaching greed baron who just ran his bank into the ground, right?
The PROBLEM is (current conventional wisdom tells us) that the U.S. federal government (led by Hank Paulson, who comes from the middle of the capitalist jet stream) AGREED with me ideologically, and decided, on principle, to let Lehman run out of business. And according to the Europeans (who really are the socialists among us, let’s be honest Paul) and later the cowed Americans, that was the biggest mistake that was made. The economy is too intertwined to let certain companies fail, etc.
So do we stand on our principles, or do we look to history, albeit potentially with a little-girls’-tea-club mentality driving our thinking, and turn to socialized government to heavy-handedly intervene? The answer seemingly, depends on who you are.
BTW, Paul, did you notice Matt’s blog on the oil funds people are buying in droves, and how crazy it is for people to be buying the products that are rolling into the near-money futures in an environment of enormous contango? It is a GREAT blog from Matt, and I thought it might be interesting for you to comment on this in the European context, as I know there is a similar array of products listed on European markets as well.