Wednesday, October 22, 2008

French Socialist on the Banking Crisis

Le Monde:
"la réponse à apporter ne peut pas être la renationalisation définitive du secteur bancaire, mais la création d'une nouvelle régulation, car si les marchés sont mondialisés, la régulation, elle, ne l'est toujours pas".

The article is entitled "The Temptation of Vintage Socialism." Again, I think liberals, and certainly socialists, are overreaching in their calls for increased government intervention. Remember, the government is like the Marines. You want it around in a crisis, but once that crisis is gone the government cannot make the countless intelligent decisions needed to offer the best solution. During a crisis, the best solution ain't needed, only a solution. When we are talking about choices regarding what to produce, for whom to produce, and how to produce the government is not the best solution, even given the financial crisis. One must remember that even if the stock market destroyed an ungodly amount of wealth in recent days, it still created that wealth in the first place and it hasn't wiped out anywhere near all the wealth it has created.

But the bove quote from Le Monde gives me hope yet. Manuel Valls, a socialist politician, says, "the response must not be to renationalize the banking sector, but the creation of new regulation, because if the market has globalized, the regulation, it, never has." The very idea that a French socialist is concerned about nationalization means that socialism, in its worse incarnation, is dead. The early-80's Mitterrand government nationalized a bunch of stuff, only to denationalize them later. It humbled the French socialists. People like Dominique Strauss-Kahn, the current head of the IMF and part of the Mitterrand administration, learned that government intervention in the markets can go too far.

As far as regulation goes, I'm for global capital rules, etc. The devil is truly in the details though, and in truth no amount of regulation is going to stop financial crises from ever occurring again. They, by their definition, occur because everybody - banks, consumers, government - miscalculates. Regulation can reorient banks' perceptions of their risks and positions, but at some point people are going to miscalculate systematically again.


Anonymous said...

Oh FliG, I had no idea that you were a racist. And it saddens me to learn that you are. And to think it was you, by pointing out Kathleen Parker's column on Palin speaking in code to the base of the Republican party, who first made me aware of the practice certain people (like racists) of employing loaded terms to connect under the media's radar to their followers.

Thank goodness we still enjoy freedom of the press where "people in the know" can set people like dumb old me straight about people like you, John MCain, Sarah Palin, and J. Edgar Hoover:

"Shame on McCain and Palin for using an old code word for black
By Lewis Diuguid, Kansas City Star Editorial Page columnist

"The "socialist" label that Sen. John McCain and his GOP presidential running mate Sarah Palin are trying to attach to Sen. Barack Obama actually has long and very ugly historical roots.

"J. Edgar Hoover, director of the FBI from 1924 to 1972, used the term liberally to describe African Americans who spent their lives fighting for equality.

"Those freedom fighters included the Rev. Martin Luther King Jr., who led the Civil Rights Movement; W.E.B. Du Bois, who in 1909 helped found the NAACP which is still the nation's oldest and largest civil rights organization; Paul Robeson, a famous singer, actor and political activist who in the 1930s became involved in national and international movements for better labor relations, peace and racial justice; and A. Philip Randolph, who founded and was the longtime head of the Brotherhood of Sleeping Car Porters and a leading advocate for civil rights for African Americans.

"McCain and Palin have simply reached back in history to use an old code word for black. It set whites apart from those deemed unAmerican and those who could not be trusted during the communism scare.

"Shame on McCain and Palin."

FLG said...

Oh dear.

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