[Swiftwater Gazette] Informational Broadcast on Internet

[Brad Haslett]

Ed,

"Doing God's work?"

The investment banking industry has never been short on ego.  I don't
begrudge these people the money they make, but companies like
Goldman-Sachs were built on capitalizing the gains and socializing the
losses.  Follow the money.  Who contributes the most money to politics
and which party do they predominantly contribute to? The most recent
bubble to burst, real estate, was based on two broad assumptions (1)
real estate values always rise, and (2) the underlying debt is backed
by the full faith and credit of the US Government. Companies like
Goldman-Sachs don't achieve their status by "fooling some of the
people all the time" or even "all the people some of the time" They
achieve success by buying the "gang of 535" most of the time (doesn't
matter which party is in power).  Per the article I posted earlier,
when Hank Paulson went running into Bush 43's office screaming "the
sky is falling", it was in his world. Hell, I bought into the hysteria
for awhile.

The world is too interconnected and capital too free to move where it
is treated the kindest to think that we can somehow regulate the
finance industry down to the last detail.  What we can do is get the
federal government out of the risk mitigation industry.  You want to
risk your own or your investors money?  Have at it!  There will always
be the Enrons and the World Coms, and the Bernie Madoffs.  But, when
things look too good to be true, they probably are. Generally
speaking, when something as big as the derivatives market fails, it
has the fingerprints of a government policy all over it. The market
works because it rewards success and punishes failure.  When the
government intervenes by subsidizing failure and discouraging success,
we get what we have now.

During the prosperous decades in the United States following WW2,
finance was dull and manufacturing was exciting - a bit like China is
now.

The choice is this; do you want the "invisible hand" or the
centralized planning fist?

Brad

On 11/11/09, Ed Kroposki <ekroposki at charter.net> wrote:
> Read about Goldman Sachs:
>
> http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6907681.ece
>
> Ed K