This video is pretty funny. (I can't seem to embed it).
Some thoughts:
1. O’Leary is an ass. That’s no way to talk to someone you disagree with. Chris Hedges is completely right that this is Fox-news calibre debate.
2. I actually agree with some of what he says: Financial-crony capitalism has done lots of damage. The people who were behind it seem to be getting away with it, etc…
3. Finally: “Let’s restore the rule of law.” I actually agree with that as well. But I’m not sure we mean the same thing. In my book, the rule of law means that the government is bound to not use its power arbitrarily to confiscate private wealth; bail out losers; pick winners; impose burdensome and onerous regulation on economic activity etc… Rule of law is great, but it means getting the government out of the economy.
My biggest gripe with his argument:
He says that the cause of all of this was “unfettered capitalism.” He goes on to say that “There have been no regulations on Wallstreet,” that “Financial institutions don’t produce anything,” he praises John Raulston Saul (which made me dry heave for about 5 minutes) and concludes that Canada’a banking system is awesome.
This is pretty much all garbage. 1. Government intervention was the decisive cause of the financial crisis. 2. Wall Street, Banking, and Finance in the U.S. were heavily regulated before the crisis.
3. The real problem is not capitalism, but crony-capitalism. Crony capitalism is how I describe this unhealthy relationship between government and business in the U.S. I think we all agree that this is bad. But the way out is not more government (more corruption), or more burdonsom regulations (written by insiders, gamed by crafty traders). Rather, smaller government and stable rules is the smart way to go here.
That guy should be fired, but you're right about Hedges'; he is well spoken but takes quite a few liberties in his arguments on cbc. But this doesn't excuse O'Leary from being a dick.
ReplyDeleteHM
I know I'm arguing with a libertarian here, but this one place where the argument has to be made for more government, it just has to be the right kind of government.
ReplyDeleteYou said government intervention was the cause of the financial crisis. Unless you're calling a total lack of regulations "government intervention," I strongly disagree.
It was precisely because government agencies enacted "regulations" that actually served to advance the wealth of the very corporations they claimed to regulate that got us here.
The industry was heavily regulated, yes, but with bullshit regulations that had no founding in reality.
Obviously the relationship between government and business was horrendously flawed and incestuous, but the answer here certainly isn't a total lack of regulation. That would be anarchy, allowing the insiders and craft traders to do whatever they wanted and to continue to fuck the lower and middle classes.
Also, Kevin O'Leary is a sack of shit.
I'd argue that the U.S. government's policies were the main cause of the financial crisis. It wasn't so much the regulations, but the low interest rate policies of the federal reserve; the "too big to fail" policies of successive governments; and a bunch of policies that offset the risk associated with mortgages, at the level of the lender, the borrower, and investor. All of this led to lots of risk taking by investment banks, which caused the crisis.
ReplyDeleteI would argue that without those policies in place, things probably would have been ok. Investment firms aren't out to wreck themselves, they want to remain profitable. Only when they can offset risk onto the public purse do you get the kind of bad behavior.
A free market system would be the best way to go. We haven't had that yet, though.