So
Jamie Dimon, the CEO of JP Morgan Chase, still thinks the banking industry can
regulate itself? Without government regulations, the “too big to fail” banks
brought the U.S. economy to its knees with unchecked speculation in 2008, and
it was you and I, the taxpayers, who had to bail them out. And now billions are
lost again.
Could
there be any more proof to implement government regulations now, in order to
protect the struggling taxpayer against the greed and self-interest of banks
such as JPMorgan Chase?
Camille
Gaeta, Kearny
I responded with these comments:
The causes of the financial crisis can all be traced back to
massive government intervention in and regulation of the financial, mortgage,
and housing industries, not “unchecked speculation.” Yet those blinded by
visions of the god-state call for more of the same, as if government officials
are endowed with omniscience and infallibility that can somehow eliminate all
human error by bounding bankers and investors hand and foot.
Finance is the most heavily regulated industry in America,
and that is the source of the problem. Regulation of the banking industry,
which hasn’t “regulated itself” for almost a century, should be massively
rolled back, starting with the “too big to fail” taxpayer bailout policies that
encourage bigness and excessive risk-taking.
JP Morgan and its investors should be left alone to heal its wounds and
its reputation, and take its lumps—just as it should be free to reap the
rewards of successful investments. It’s simply immoral to burden all other firms
with more regulation because of the mistakes of the one.
It’s time to stop blaming the straw men of “greed
and self-interest” and recognize that in America today we are witnessing the increasingly
spectacular failure of the regulatory state.
Gaeta and other knee-jerk regulation faithful should also consider that the 2008 financial meltdown was caused by government-imposed unsound mortgage lending standards. Yet these are the people that are supposed to dictate to banks what they can and can not do with the money they manage?
Give me "greedy" self-interested bankers over our altruistic public servants any day!
And on the "greed and self-interest" front, I must wonder: JP Morgan was certainly--and properly--motivated by self-interest in its trading strategy. It's loss resulted from miscalculations or, as Dimon put it, "stupidity." So, I wonder what Ms. Gaeta would have had them do; act on altruism and selflessness, the opposite of "greed and self-interest?" What would that mean; that they should try their best to lose as much money as possible, in hopes that some "stupid" mistake would enable them to accidentally make money?
For more insightful commentary on this, read JP Morgan's Big Loss Highlights the Virtue of Capitalism at The Objective Standard Blog.
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