How government is destroying the financial market and capitalist ideology?

In my opinion governments of all the major economies are in the process of destroying the financial market and capitalist ideology. Centralized planning was a concept followed by communist regimes and they failed because economy as a whole is too big to be controlled by any government or G8/20 nations.

What makes capitalist ideology work is the innovative ideas and entrepreneurship of individual citizens. If millions of individual work towards their individual goal of being successful in their life, it takes country forward and grows GDP. What government is trying to do by all these bail-outs to financial institutions, manufacturing companies and unemployed individuals is encouraging bad behaviors and discouraging the innovation and entrepreneurship of their citizens.

In an efficient market – weak companies declare bankruptcy and go out of business and new companies take their place because they are innovative and create wealth for their investors. By helping GM and Chrysler, the US Government is making sure that new car companies with more efficient/hybrid cars will have to compete with Government Motors (GM) with full backing of US taxpayers. Is it fair to the new car company? Similarly, AIG was supported with full backing of the US Government – Do we really think we don’t have enough insurance company in the world? AIG’s gain was loss for Prudential, Aetna, Allianz and other insurance companies. If Citi had failed that would have been good thing for Wells Fargo, J.P. Morgan and other well managed banks.

US government keeps saying that if we didn’t have all the bailouts, the situation would have been worse in terms of access to capital and unemployment. I agree with them but I don’t think US government has enough resources to provide bail-outs required to keep the “Doomsday scenario” from happening. If we continue with current budget deficit projections, at some point, US government will have problem in raising capital to continue these bail-outs. That may not happen this decade but it will definitely happen as I don’t see any budget surplus anytime soon.
What governments have to realize that economies have to go through these business cycles? To some extent this is evolution and intelligent design in one. Growth and recession are part of the business cycle and we have to learn to deal with them without interfering with them with all the GOVERNMENT POWER as we are trying to do across the world. Week companies fail and new companies takes their place and world and economy goes on. So let Greece default.... They would go through the pain and come out stronger like Mexico, Russia and SE Asia in 90s. As far as US goes, stop handholding individuals and company as we’ll come out stronger as we have done in the past.

What's wrong with being a socialist?

Last week Obama called NY Times reporter to clarify his position on him "NOT BEING A SOCIALIST". What's wrong with being a socialist? Is it a dirty tag? Is everything perfect with Capitalism? This is my 2 cents on this subject....

I don't think there is anything wrong with being a socialist. Its a form/strategy of setting government priorities and how it impacts citizens. Being capitalist assumes that we all are selfish and if we take care of our own (self, family, business etc.) interest the world would be better place. I totally agree with this assumption of being a capitalist but with a restriction - we shouldn't harm others to take care of ourselves. For an example, my business will be more profitable if I have no competition but that doesn't give us right to harm my competitors. The government regulates this by creating laws. There were regulations (Glass Steagall Act, 1933) in place to separate banking and investment banking till late 1990s and that limited the risk taking abilities of commercial banks. The free market/capitalist principles says less regulations are better for the world and that created the financial mess we are today by repealing Glass Steagell act.

So, government has a responsibility to regulate industries, improve the conditions for its citizens and make laws so that everyone has same opportunities without any bias. Now, here comes the socialist idea.... Make government big in terms of increase in taxes and its budget and improve the life of citizens as a whole. In other way, you tax people/companies who make more money and give services/benefits to the poor. It's some form of redistribution of wealth and personally I don't like it but I think government is just doing its job to help its citizens who need that help to be competitive in market place. Our government has a responsibility to improve quality of life for all the people and not only the productive people, intelligent people. It has to help retired, elderly, disabled, children and others who can't help themselves.

So, it's a fine line between being a socialist or a capitalist. I think government has a responsibility to be capitalist as well as socialist as USA needs both of them at some point of time. Life is not black or white rather it's a shade of gray and Obama has to learn to be both (socialist & capitalist) without offending the other side.

Happy New Year 2009!

Happy New Year 2009!

My vote tomorrow....

I'll vote in my first US presidential election tomorrow and I want to post my comments regarding my choice in this election. Before I make my case, I want to make following points regarding my general thinking about politicians:

1. They are all CROOKS. All of them belong in a prison for some duration for lying and quid pro qo which is illegal. They lie and make up facts in their favor regarding their opponents and you have to be a terrible person to do that.
2. Either they are very patriotic or a total moron. Why would you take a job which doesn't pay much, is 24/7 and whatever you do 50% of your people won't like your decisions/actions?

Having said that here are my choices:

1. For President, I'll vote for Barack Obama. I don't like his tax policies, Iraq policy or Big government policy but I'll vote for him as he seems to be smart. He can understand the grief of his citizens as he was poor, grew up with single mother and grand parents and knows how to succeed in life. I liked John McCain in 2000 primary but he is a different man today than in 2000. I question his judgement in picking Sarah Palin as his running mate and people he surrounds himself with. I was undecided till the first debate when he mentioned, "Senator Obama doesn't know/understand" gazillion time. That was a turning point for me after saying in a "Bible FAKE debate" that middle class is people making 3-4 million per year.

Having said that I won't regret if Sen McCain wins as he is a patriot and very deserving to be a president.

2. Besides that I am voting against all incumbents in my precinct/district except Cong. Gerlach and PA Attorney General Tom Corbett. Compared to other Americans, I am a political junkie so if I don't remember one thing you did in last 2 years, you are not getting my vote. So, Goodbye Mike O'Pake and David Kessler....

So, lets go and vote so that we can regret it together for next 2/4 years!!!!

My First Blog....

This is my first blog so I'll try to be nice. Pennstate Nittany Lions seems to be real this year and I think if they go undefeated they should go to a BCS game. Ohio state is playing ok against Wisconsin but I don't think they are that good this year.

I am getting excited about Eagles tomorrow as I think they are gonna win against Redskins.