Wall Street gambled, everybody lost - by Tao Yi-Feng
Over the past 30 years, these “fittest” market economists have used their strong political influence to push other countries toward laissez-faire market economics, calling on governments to loosen financial restrictions and in the process opening up more economies to severe competition on the heels of rapid international capital flows — all in the name of efficiency. However, after the ongoing financial crisis reared its ugly head, we were shown that loosening financial restrictions does not actually improve transparency in market information, nor does it allow for the most effective allocation of resources. The only thing the loosening of restrictions accomplished was to allow financial institutions on Wall Street to play their money games. And the more they gambled, the greater their appetite became for risk and profit-taking. In the past, the destructive behavior of these gamblers had a negative influence on the economies of other countries, but things have now swung around and their actions are starting to hurt the US economy.The US$700 billion debt issue is equal to what the US has spent on its war in Iraq. In simpler terms, it is the same as asking every US citizen to pay US$2,000 to help clean up the mess created by Wall Street investors.
The US government’s plan is clearly aimed at “taking from the poor and giving to the rich,” but everybody has been discouraged from saying anything against it, for opposing something that could potentially help stabilize the market is bound to attract opprobrium. The plan sought to convince the market that the Treasury Department will take on the bad assets of the main US financial institutions to help them regain the confidence of investors while escaping the vicious cycle that has gripped house prices and the financial market since the suprime mortgage crisis began.
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