Tuesday, October 07, 2008

Wall Street Greed

An excellent comment from Doug Wilson on the current financial mess, and the role of (and consequences for) greed:

I am preaching on Psalm 49 tomorrow, and I will be going after [the issue of greed]. But whenever politicians go after it, all they do is create regulatory mechanisms for the next round of greedy businessmen to manipulate at will. The very best way to address business greed in the public sector is to insist that the greedists, and those foolish enough to do business with them, be required to eat their own cooking.

Capitalism in good times and safety net socialism in hard times is not capitalism. Capitalism is not riding the bubble until it bursts, and then to suddenly discover the need for government intervention "from time to time." Graspers and grabbers need to be hit a whole lot harder than the Feds will ever hit them. Yeah, greed on Wall St. was a big problem. Let gravity deal with it.
If you were at the casino playing blackjack, and the casino had an unwritten policy of giving you all your money back if you lost your life savings, would you be more likely or less likely to go all-in on that 15 you were dealt?

Proper, capitalistic risk assessment did not cause this catastrophe. Government guaranteed, risk-free speculation did.

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