The simple fact most Americans don't understand about our "too big to fail" banks
Wednesday, May 16, 2012
From The Ludvig von Mises Institute of Canada:
If there is one thing Barack Obama has proven throughout the first term of his presidency – besides his expert use of grandiose, simplistic rhetoric – it is his ineptness at understanding economics. Last year, the President hilariously blamed automatic teller machines and kiosks for unemployment. Because politics is defined by reactionary and short-term consideration, Obama doesn't see the additional employment and capital surpluses that result by eliminating labor costs.
Such Luddite-esque thinking often provides all the more justification for government interference in the marketplace to try and equalize outcomes. This view is paired with the perception that rather than society giving legitimacy to the state first, the state and its enforcers are destined to guide society. Under the pretenses of promoting the public good, central planners see failure not as a necessary process of the market but an opportunity to usurp more authority. Ludwig von Mises accurately recognized the inevitable goal of economic regulation decades ago:
Interventionism cannot be considered as an economic system destined to stay. It is a method for the transformation of capitalism into socialism by a series of successive steps.
Nowhere is this more prevalent than in today's financial sector. The recent $2 billion trading loss by Wall Street giant JPMorgan has given more ammo to the crowd that wishes Washington to have more of a say over the operation of the big banks.
Obama, ever the politician, has taken the loss as an opportunity to tout the merits of banking regulation. In an interview on the daytime talk show The View, the popular ladies get his thoughts on Jamie Dimon's big flub...
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