Shouldnt govermetns have a tight grip on financial markets?

Money is a medium to transfer credit for services rendered and products delivered. The financial system is a powerfull tool to shape society, to devide it into classes casts and such, to control the economy of a country. Many societies realized this, some countries even made it clear that the power about the medium for the economy should be with the people, among which the united states. However since control of the countries currency has been removed from the elected representatives and there is only talk of keeping the financial markets deregulated or further deregulating them.

Napoleon correctly observed that the hand that gives is above the hand that takes. Wouldnt deregulated financial markets mean that not goverment, but the wealthy elite which controls the currency shapes society?

reply to post by Cassius666


Of course they should, but how can they when our 'governments' are owned by the people who control the money.

They do have a tight grip on the financial markets right now.

All they gotta do is make sure that 'their guys' get put into positions to regulate and legislate how these markets are regulated.

That's how we got into this boat in the first place.

Welcome to the 'revolving door'.

Governments should have absolutely nothing to do with markets.
Government involvement in the economy is what got us where we are in the first place.

Originally posted by ThrowCatsAtCacti
reply to post by Cassius666

 

Of course they should, but how can they when our 'governments' are owned by the people who control the money.

They shouldn't be because of that very reason. You just contradicted yourself.

Without government regulation, it would automatically fall to the free market (the people) to regulate these types of issues, which is a lot easier to trust in than this broken joke of a system.

Just think, if we the people had any power to regulate the market (such as in free market theory), than it would be you and I who regulated their actions through supply vs demand mechanics. People who are crooks will not keep their customers returning, and those who are doing things right would be successful.

Instead in our "regulated economy" the crooks can take over and set up the regulations any way they please, and can dominate no matter how bad their policies are.

They at the very very least need to have control over the issuance of the currency. Giving control of that to private companies is one of the biggest reasons our economy is in its current shape.

Looking at the last 100 years as the government has gotten more and more control over financial markets/ it doesn't seem to be working. I would say for the 100 years after we gained independence, as our country grew to become the shining diamond of the world due to the unregulated opportunity and explosions in technological advancements, is the perfect example of how to run a financial market.

reply to post by Cassius666


Sure. They have done such a bang-up with Fannie and Freddy Mac that they deserve even more control over the markets.

The government has shown itself to be utterly incompetent in understanding, let alone directing market activities,

Originally posted by GoldenRuled
Looking at the last 100 years as the government has gotten more and more control over financial markets

Care to explain how they've gotten more control over financial markets? Or do you always repeat the lies found on Fox News and treat them as fact?

Originally posted by pierregustavetoutant
Governments should have absolutely nothing to do with markets.
Government involvement in the economy is what got us where we are in the first place.

Again with the comparing of elected leaders to the communist system. What exactly did the American goverment do, to get the housing bubble going and making it go global by tying up bad credit into packages sold around the world, apart from deregulating the markets to make it possible I mean?

I really have to vent about Reagan and everybody else who compares goverment involvement of elected leaders to communism. You elected these people to represent your state. If they dont run the show who does? OC, that it is legal to basically bribe congress and buy yourself power is a different issue. I am talking about the way things should be and not the way things are (goverment representing whoever offers the juicy jobs after the therm is up).

The current lack of enforcement of regulations on the books, and the deregulation which has gone on since the Reagan era, is why we are being destroyed by financial institutions.

As soon as a purely capitalistic culture such as the US allowed a central bank to call the shots, it was all over. The big banks are all about getting government welfare, bailouts, and having their poor bets backed by our tax dollars, but they are the first ones who extol the virtues of a "free market" and a government with a "hands off" approach to their business when it comes to them engaging in economic malfeasance.

There is no such thing as a free market today. The government is supposed to be there to make sure the playing field is level, but as we all know, not only have they failed miserably in their duties, but they have allowed us to be bankrupted by these thieving low-lives.

True capitalism, in my opinion, is inconsistent with the central banking model. Central banks are a failed paradigm and we don't have long before we find out just how bad an idea it is.

reply to post by muzzleflash


Government was in comma's because a government that functions how it is ment to is the voice of the people

reply to post by FissionSurplus


Exactly the wealthy who buy themselves power, that serves their interest preach to the choir, that they should not rely on our elected leaders, but basically let them ("the free market") run things, who, again, buy themselves power and run the goverment any way it serves them.

All this time the country has been brainwashed into shunning the intervention and ideally protection of their elected representatives, comparing it to a communist dictatorship, insiting that the ideal goverment does nothing, while the very same people who divuldge that ideology give their bought congressmen an extensive to do list.

reply to post by Ghost375


You're kidding, right?

The existing regulatory bodies, notably the SEC have augmented their authority since the agency was founded in 1934. Compliance with SEC regulations and audit requirements becomes more onerous each year. The SEC now has its own armed, militaristic unit in its enforcement branch. Why would the green eye shade gents need guns? Can't they just drop a dime to the FBI to get some help? Nope - they need their own (as does the EPA)

The FDIC, created in 1934 has also placed increase burdens on the banking sector. The entire housing market blow-up and subsequent financial meltdown was caused by the government's social engineering via banking standards, forcing banks to loan money to unqualified borrowers. The economic situation we find ourselves is a direct result of the government's perversion of the market, notably through the perversion of standard credit principals and practices.

The US Treasury's insistence on "mark to market" rules for assets held on commercial, retail and investment banks perverts the market by improperly valuing the legitimate quality of bank assets, forcing banks to take unnecessary steps to eliminate those assets from their balance sheets. This not only weakens in a real sense the bank's balance sheet, but destroys market segments, as it has recently in both real estate and hedge funds. Those mark to market regulations went into effect in 2007

The government's absurd control over raising capital via Sarbanes/Oxley has constrained growth, moved companies to list on non-US exchanges and is a tax on US business that is in the $hundreds of billions. What has that accomplished? Merril Lynch, Countrywide, Bear Sterns, Lehman Brothers, GM and a host of others were all compliant with Sarbox. There are thousands of companies in the country that would be significantly larger were they allowed to raise capital easily. They can't, so they don't and remain private.

ERISA standards relative to qualified retirement plans has significantly constrained the flexibility of people when investing their retirement assets. The overhead of ERISA compliance erodes market returns and does little to reduce risk as evidenced by ERISA funds holding garbage laden CDOs.

Yes, the government has grown its role in the regulation of what used to be free markets, almost exclusively to the detriment of the free market and thus of free people.

Over regulation is just as bad as under regulation. The only way for the financial markets to correctly work is to prudently regulate for safety and securities sake without stifling growth. The free market is a myth you can never let the markets go completely unregulated, because people will use their wealth to ensure they stay on top and eliminate the competition. Sorry there has to be some uniform ruleset to ensure fair play.

Separating those that create and enforce the regulations from those that have to live under them is a wholly different animal to contend with. Currently there is a revolving door where people from the public sector go to jobs in private sector in many cases to the companies they were regulating. It is this issue which has caused the most damage. No amount of regulation or non regulation will matter until this issue is dealt with, and is simply much bigger than regulation = bad, no regulation = good. They can be good or bad depending entirely on what they are intended to do and how well they achieve that goal.

The financial regulations we had pre Bush 1, were fine as they were and worked rather well. The rich were still rich the only difference was they couldn't flush the economy in the toilet on a whim. Clinton further eroded them, and it was on purpose. There was no way we could sustain or gain economic growth without him doing so after NAFTA and he knew it. No one noticed because the dotcom boom hid most of the warning signs. None of what we are facing now is the work of three years or 11 years but goes back some 30 odd years if not more. The only real difference is up until now not enough people were affected for as long a period of time.

What you have to realize is that the State has always been a tool of the Ruling Class, since the very beginning of the emergence of capitalism out of feudalism.

Early on, American Multinationals expanded all over the world using the force of the military and business called upon the government to crush labor struggles. For a recent example, look at how quickly the government stepped in to use force on the OWS protesters.

The right-wing "free" market libertarians and conservatives will have us believe that there was once a time when the government was was minimal and never intervened in the the market on behalf of private interests. This notion of the "free" market is a myth; it has never existed and never will.

Our present condition today is the inevitable result of the consolidation of wealth and power in the hands of the ruling class. Don't let anyone trick you into the false belief that the State can be separated from the ruling class.

reply to post by Cassius666


The lack of regulations is what caused the financial collapse, so I say yes. If there were strict regulations in place, the insane business practices that ended up collapsing the economy would have been flagged long ago. But instead, they were allowed to sell those credit default swaps, derivatives, and all of that fun stuff.

But this could also pose a problem. Since our government is currently corrupted and hijacked by bankers and other wealthy elites, they can put people in place to push their agenda. This is reflected pretty clearly by the 11 Goldman Sachs employees that Obama appointed to his Administration.

So if they can have people write the regulations, they can find ways around it. They can rig the system while making it appear that they're playing by the rules. And that's arguably what they did, Obama talked about Wall Street greed and corruption causing the financial collapse, but his regulations really didn't do anything substantial.

reply to post by TupacShakur


There was and is no shortage of regulation. The fact of the matter is that it is the government regulations that caused the problem to begin with. After three years of pounding the table and hammering the investment sector of the economy, Dodd/Frank and all of the other feel good rubbish, what happened to MF Global? It blew up and nobody is willing to state where the money went. The questioning that Corzine received was an absolute joke. Such an attempt to appear tough when any person with 5 years of experience in operations in the investment business could ask three questions that would prove that he could find and should have found where the money went. The absurd requirement of the government to give cash to minorities and the poor are what created the CDO market to begin with. If there were not all of these bad loans out there that the government forced the banks to make, there would have been no market for the CDOs. It is pretty simple. The government tells a bank to make a bad loan. Enough bad loans and the bank falls shy of the FDIC balance sheet requirements and they need to get the loans off the books to stay in business. They sell them. The only way there is a market for those loans is to bundle them together with decent and outstanding loans. If the crappy loans were not made in the first place, there would have never been a CDO market.

The government has a role in the regulation of markets. Their role should be in regulating the maximum level of transparency in all facets of the industry. The government should also take a significant role, with a public/private partnership and rate securities, putting S&P and Moodys out of business, or at least reduce them to a provider of data.

The nonsensical rules/regulations proposed and enforced by the government are meaningless, absolutely meaningless.

The government has zero competence in engaging in the affairs of the markets, whether those markets are in autos, solar panels or securities.

Originally posted by TupacShakur
reply to post by Cassius666

 

The lack of regulations is what caused the financial collapse, so I say yes. If there were strict regulations in place, the insane business practices that ended up collapsing the economy would have been flagged long ago. But instead, they were allowed to sell those credit default swaps, derivatives, and all of that fun stuff.

But this could also pose a problem. Since our government is currently corrupted and hijacked by bankers and other wealthy elites, they can put people in place to push their agenda. This is reflected pretty clearly by the 11 Goldman Sachs employees that Obama appointed to his Administration.

So if they can have people write the regulations, they can find ways around it. They can rig the system while making it appear that they're playing by the rules. And that's arguably what they did, Obama talked about Wall Street greed and corruption causing the financial collapse, but his regulations really didn't do anything substantial.

Yes of course, you are right about that part, I meant to say a goverment as it was intended, for the people, is desirable and something to be embraced, rather than shunned as somehow communist. That currently we have the situation where congressmen are up for grabs to the highest bidder, is oc less than desireable.

reply to post by Cassius666


The government and the free market.

The Government should be one part football referee and one part casino card dealer.

Meaning they shouldn't interfere with the game - free market, but should moderate it, enforce the rules and be quick to blow the whistle on foul play or slap the hand that tries to cheat....because the free market is only great if it is a fair, level playing field for all players.

The issue we have right now is that the dealers are in cahoots with some of the big money players sitting next to the average joe at the table....and that means the longer you play the more of your chips are going to land in his stack.