Consumer is a King!
Well we all have heard this right?
If you see the amount of money Coke, Pepsi, Citibank spend on lobbying in the US, you know how much of wrong doings they must be doing. The food industry, pharma, insurance, banking, auto and of course the lobbying industry are really the villians in US.
It is amazing that the financial services industry in the US spends more on lobbying in Washington than the combined lobbying budget of many industries put together! If the people in the US CANNOT see it, maybe they are blind. Let us not sleep – sleeping is the prerogative of the government and the regulators. As an individual I know I have to be alert to be alive.
The Financial Services industry’s contribution to the Presidential campaign is too huge for us to ignore ( upwards of 2 billion US dollars in the past decade 🙂 ).
The banks are allowed to take deposits (guaranteed by the government) and they play the derivatives market – we need socialism back in some form to stop this stupid crony capitalism. This is like saying I will guarantee/ insure all your risks, but the premium will be collected by some body else. The losses belong to the people, and the profits belong to the EMPLOYEES (shareholders be damned!!). This is the impact of lobbying.
Theoretically it is possible that another Lehman/ AIG is building up somewhere (in terms of derivative positions) with the money that a bank has got (guaranteed by the government) – if there is a loss, the bank WILL HAVE TO BE BAILED OUT by the Congress. Rofl or LoL – you decide. If you are asking me ‘Will the Congress pass this?’.
Well, well fair enough a question – there are ONLY 70 members on the House Committee on Financial Services – what more do I need to say?
If you are wondering why the people in the US are angry at wall street you must see what Citibank has done. There is a link at the end of the page just read it..
http://www.time.com/time/business/article/0,8599,2097308,00.html
pravin
why do you need socialism back? shouldnt the solution be to remove the power of the politicians to dole out ‘protection,regulation and favors’.why do you want to give more power to the same politicians and regulators who have been bought by the big companies over and over again?
the people ‘occupying’ wall streets are angry,but clearly,they should be occupying washington dc and not wall st.not to mention,there is no big financial services company on wall st anymore.they all moved to midtown many years back.
why cant the americans elect ron paul -the only presidential candidate who doesnt receive one dollar from lobbyists?why do they have faith in obama whose biggest donor is goldman sachs?
subra
Capitalism is as much utopian as Socialism. Like democracy they look good on paper – and most of us believe in ‘TINA’ – there is no alternative’ theory.
Saving capitalism from crony capitalists like Obama, Rajat Gupta, Ben Bernanke is important 🙂
mahesh
Agree with Subra.
The world , over the years has grown too complex & so has human life .Individuals have become too selfish , for any system – capitalism or socialism to succeed. Changing leaders may not help , since the selfishness has got embedded deep into way of life and will not easily change. One may see more Anna Hazare type movement in different shades, “Occupy wall street” being one such.
subra
Every industry tries to loot the outsider. Banks, credit card companies, pharma companies, doctors, insurance – nobody speaks clear customer friendly language. How will a customer understand ‘investment content ratio of a life insurance company, ‘loads’ of mutual funds, ‘super built up area of real estate industry…and so on. The Government language is worse – try filing your return without a CA!
pravin
i really dont understand why selfishness is being blamed.but you cant make other people unselfish by legislation or at the point of gun.you can only persuade at the most (only to realize it is a futile activity).
free markets are better only because it allows human beings to harness their so called selfishness for everyone’s good.socialism simply cannot do that unless everyone turns into sheep.
free markets dont need people to be saints or selfless or kind or rational or knowledgeable -as long as they dont kill people or steal from others.
that is ofcourse utopian: murder and theft are not going to go away.deal it with.they are human problems and the solution is to protect yourself against it.
pravin
also,whats with insider trading? who is the ostensible victim of insider trading? it seems to be a victimless crime like prostitution.
insider trading should be legalized.without it,your share price will not reflect its true value.
the idea that trading partcipants should have equal information is preposterous.
subra
pravin u are either an economist or you are not. If u think insider trading has no victims, go back to reading history of capital markets.
if you think capitalism exists anywhere in the world, think again.
Dr Mohammed Ali Khan
“– we need socialism back in some form to stop this stupid crony capitalism.”
Yea, its like a doctor saying : Hey this medicine has lots of side effects, so instead, lets try some poison on you!
Subra, don’t you see the issue that’s plainly in view : The government interference in the markets, nullifying risks, bailing out failing companies IS Socialism.
So, asking for more Socialism is like to ask for more concentration of the poison that is already making your patient ill.
Why do companies lobby so much?. Its only because governments have acquired for them the power to pick and choose winners and losers, a job which should be done by the people i.e . markets. Its much cheaper and easier to bribe (sorry, lobby) a politician than to convince a population to buy your product and not your competitors.
Suresh
The Western mindset is naturally extremist. It will either be full fledged crony capitalist or full fledged soviet socialist. The answer is certainly not Nehruvian muddle of the road thinking. Rather develop a mechanism which moderates any ‘ism’ and keeps the moderation in the hands of the community. Democrazy is not that moderator either.
pravin
subra,i am not aware of one example of insider trading that has explicit victims.it is a victimless ‘crime’. this is not an economists’view point. it is a freedom loving person’s view point.
for the record,i am also against Intellectual property.the very concept is anti free market.
nobody is saying that pure capitalism has existed anywhere.but the point remains that societies which have tended towards free markets are much more prosperous.there is a constant fight between freedom and tyranny and whenever freedom gets a break,people enjoy .but they are often unable to remain vigilant to the sneaky ways of tyranny.
tyranny is never a solution.