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Saturday, March 27, 2010

Those who Short Obama--Beware

I read this little piece of commentary in Slate this morning and it made me quite happy. So, despite the ardent predictions of doom by the radical right, the stock market has risen quite happily since the passage of the Healthcare bill. By the way, since I didn't write anything about it while it was happening, allow me to say:


Look, like all ravingleftatics, I wanted a single-payer system--but getting anything through that morally bankrupt mass of congressmen who were pre-ejaculating in their excitement to quash this bill is an achievement. And, so it seems, due entirely to a partnership of Nancy Pelosi and President Obama. Well good on them. I don't like that the abortion thing managed to slip its way in there, but again, we can pass stronger measures specifically to protect a woman's right to choose. Or slip them in some other omnibus bill. How will this play in the midterms? I don't know, but it would have played disastrously if they'd failed to do it. And Joe Biden? This is a big fucking deal was spot on. Shows that Biden is more of a mensch than Bush ever was in even his wildest G.I. Joe fantasies.

Back to the subject at hand, and the point of this post. One of the most aggravating excuses libertarians give to demonstrate how the free market will grow exponentially only completely unfettered is that strict regulations will encourage capital investors to flee to less regulated places. I can only imagine this being true in one situation. A situation just like 2007 where the market was inflating wildly because of fraud, negligence and non-existent due dilligence. Indeed, when money is easy, go ahead and invest it elsewhere. It doesn't hurt the U.S. and it helps build countries that really need the additional capital. Look at Spain, look at Greece, look at Dubai! Oh wait, look at the collapsing economies of Europe. Look at the people who are suggesting we dissolve the EU and go back to individual currencies. If companies are deciding to invest their money elsewhere, it's time to take your own money and put it under the pillow.

If accounting has taught me anything, it's taught me that despite our faults, the U.S. economy is one of the most protected in the world. And the only other places where anyone would feel comfortable investing their money, are places with similar rules. England, Australia, Japan, Canada. Think about it, where else would you put your money if you wanted it to be safe? Somewhere where the risk is so high it could disappear tomorrow? Regulations establish just cause for market confidence. So there is no basis for the idea of capital flight. The only safe economies in which to invest your money are well regulated economies. Like any risk assessment, the returns for speculation can be high, but then, you get what you pay for. People are looking for a safe place to park their money. Pruning regulations won't help anyone right now. Especially the third and second worlds, who are desperate to instill confidence in their own economies.