AS THE WORLD TURNS: News Weekly
Regulation no longer a dirty word / Great orator Obama? / Jimmy Carter II?
, April 18, 2009
Regulation no longer a dirty word
I know that "regulation" is a suspect, even a dirty, word in the conservative's lexicon. I myself, whenever encountering it, follow the practice George Orwell recommended regarding saints, i.e., I consider it guilty until proven innocent. But Mr Paul Singer - chairman of the libertarian-leaning Manhattan Institute - is onto something important and it behooves us, especially those of us who are supporters of the free market, to heed what he has to say:
"[W]e must create a new regulatory infrastructure that will meet three fundamental tests. First, it must assess and measure risks accurately, including the compounded risks of herding (traders being similarly situated and forced to unwind simultaneously). Second, it must impose significant margin requirements on all exposures. And finally, it must bring all investors and traders - regardless of whether the risk-holder is a hedge fund, bank, private equity fund, individual or government agency - under the regulatory umbrella."
Calling for regulation of any sort can seem like heresy to conservatives, especially at a moment when governments in the United States and Europe seem poised to increase the role of the state, and of regulation, in every aspect of our social and economic life. But ... the real issue is not regulation per se "but unintelligent and overbearing regulation"...
The bottom line is that in calling for intelligent regulation Mr Singer is not impeding the free market: he is helping to assure its successful operation. The market depends on the candid and publicly available adjudication of risk. That, indeed, is what makes it free.
The explosion of highly leveraged financial instruments that depended heavily on inscrutable agglomerations of debt represented a gigantic risk that was never publicly acknowledged nor adequately insured against. We are now living with the results.-
from Roger Kimball, "Scylla and Charybdis, or regulation, risk, and the passion for 'fairness' ", Pajamas Media
(US), April 3, 2009.
;Great orator Obama?
When the BBC's political editor Nick Robinson recently asked President Barack Obama a question about who was to blame for the financial crisis, the normally fluent Obama stumbled and waffled for almost three minutes. This is part of what he said:
"I, I, would say that, er ... pause
... if you look at ... pause
... the, the sources of this crisis ... pause
... the United States certainly has some accounting to do with respect to . . . pause
... a regulatory system that was inadequate to the massive changes that have taken place in the global financial system ... pause, close eyes
"I think what is also true is that ... pause
... here in Great Britain ... pause
... here in continental Europe ... pause
... around the world. We were seeing the same mismatch between the regulatory regimes that were in place and er ... pause
... the highly integrated, er, global capital markets that have emerged ... pause
"So at this point, I'm less interested in ... pause
... identifying blame than fixing the problem.
"I think we've taken some very aggressive steps in the United States to do so, not just responding to the immediate crisis, ensuring banks are adequately capitalised, er, dealing with the enormous, er ... pause
... drop-off in demand and contraction that has taken place. More importantly, for the long term, making sure that we've got a set of, er, er, regulations that are up to the task, er, and that includes, er, a number that will be discussed at this summit....
"Dealing with the, er, problem of derivatives markets, making sure we have set up systems, er, that can reduce some of the risks there. So, I actually think ... pause
... there's enormous consensus that has emerged in terms of what we need to do now and, er ... pause
... I'm a great believer in looking forwards than looking backwards."-
from John Crace, "The question that flummoxed the great orator", The Guardian
(UK), April 3, 2009.
URL: www.guardian.co.uk/world/2009/apr/03/g20-barack-obama-nick-robinson-question Jimmy Carter II?
"Obama calls for action on North Korea" reported today's headlines - which is much like a chief constable demanding something should be done about crime. If the President of the United States cannot bring the Pyongyang regime to heel, who does he expect to perform this task?
It appears that, along with the bust of Churchill, Harry S. Truman's maxim "The buck stops here" has also been banished from the Oval Office.
What was the point of America deploying two missile-killing destroyers, the USS McCain
and the USS Chafee
, in Japanese waters, only to spectate as Kim Jong-il's Taepodong-2 missile took off?
It did not take Obama long to emerge from his chrysalis as a fully-fledged Jimmy Carter II....
Obama should have ordered the shooting down of the North Korean missile, launched in defiance of a 2006 UN resolution. Such ruthless action is the only thing Reds understand. Weakness and moderation excite their contempt and ambition.
Instead, Obama is whining that something must be done. Indeed; and the person who should be doing it is you, Mr President. That is what you are paid your 400,000 bucks a year to do.
Obama's PR team is trying to depict him as firm because he still intends to implement the European missile defence shield. Yes; but how long before Vladimir Putin sells him another pup to join the one in the White House? The word has gone round the hard-faced power freaks of the geopolitical demi-monde
that here is a US president who makes taking candy from a baby look challenging.
Jimmy Carter is back. Be very afraid.-
from Gerald Warner, "Barack Obama, the rabbit in North Korea's headlights is Jimmy Carter II", The Telegraph
(UK) blog, April 6, 2009.