July 17, 2012

Banks And Wild West

"The global bank HSBC has been used by Mexican drug cartels looking to get cash back into the United States, by Saudi Arabian banks that needed access to dollars despite their terrorist ties and by Iranians who wanted to circumvent United States sanctions, a Senate report says." Regulators and HSBC Faulted in Report on Money Laundering, New York Times, July 16, 2012
Why are we defining "free markets" as similar to the lawless wild, wild west? And why is this lack of control and concern occurring even with our money in the banking industry? The right has managed to blur the distinction between regulations that confuse the consumer and cost more to enforce, than the benefits and costs received in its implementation, with the government being the referee of free markets and specifically banks.

Free Markets, capitalism, is getting a bad name. Main stream America, not just the far right, defines "free markets" as an economy that is void of any government interference, including the task of assuring that our markets are indeed free. There is little concern that many markets controlled by private entities have the ability to set the price, quality and quantity of items produced and they have a heavy influence on what suppliers can charge, including the cost of labor.

The Right has done an excellent job of equating the government playing the referee within industries versus government invoking and implementing regulations that cause an industry to be inefficient and wasteful. The left has assisted in demonizing government over-regulation by passing laws that cost more than the benefits received.

The government has a legitimate role to assure free markets are free. For decades, politicians from both the right and left have abdicated this role. A current example of this is Romney's view of free markets. When Romney was in Detroit this year campaigning he said of the Chinese, "They are good competitors, and like all good competitors, will take every advantage they can get. As long as we allow it, they will continue doing so."

A market is no less free controlled by an oligopoly than if it were controlled by government. More: http://www.freeourfreemarkets.org/2010/12/too-big-to-succeed.html

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