Heads or Tails, Government Interventionists Win
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Whether business makes profits or loses money, Liberals always find a reason to intervene
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Fallout from the massive derivatives trading loss by JPMorgan Chase continues. Of course, shareholder lawsuits accusing company executives of misleading investors about the extent of the blunder are percolating. After all, kick a rock over and expect such things to crawl out, especially in the litigious age we live in.
But a worse effect, with more lasting consequences, are Liberals who are howling that this is further proof that government intervention (read: regulation) is required, just like when the oil industry was making record profits. This would be a credible argument if such critics, or their Liberal counterparts in congress and government agencies, even knew what a derivative was, let alone how to deal with them. But they do not, as Dodd-Frank clearly does not address many salient issues on derivatives and, regulators, empowered by such congressional abdication, have also been tongue-tied and acted with feet of clay.
Yet this episode, which could well provide more political hype than economic substance, sheds light on the Liberals’ mindset. To wit, there is virtually no situation in our economy where the (not so gentle) hand of government must be laid.
Several years ago, then Senator Barack Obama and his Liberal compatriots called for a “windfall profits tax” on oil companies when they were making record profits. While he believed that oil companies and shareholders need incentives to run well managed businesses that invest in efficiency and innovation, he claimed that a significant share of the record profits the big oil companies had been making had nothing to do with their management skill or investment decisions. Now, with Chase exercising their skill and making investment decisions (albeit lousy ones), Liberals are coming to the rescue to save the day with regulations to prevent the losses that Chase has inflicted upon itself.
Which leads one to ask, what situation exists that government should not intervene? Is there some Nirvanic level of profit (or loss?) where Liberals think a perfect equilibrium has been achieved? It would seem such is a very distant, if not mythological place.
As witnessed by ObamaCare and the flurry of his many other regulations these past three years, the answer is clearly that government should place its imprimatur on virtually every aspect of society. While people will be focused, as they always are, on their wallets in this election, the issue of overall government intrusion, in both economic and non-economic matters, cannot be over-stated.
-I.M. Windee
