Sunday, April 5, 2009

Freedom and Money

Because of the huge excesses of a relativity small group of people in the financial industry, a chain of events was set off that will reverberate and ripple though our financial ecosystem for generations to come.

America was founded on the idea of freedom and the limitations of the government. One of the ways freedom is expressed, is in the ability to commence in trade with each other, within states, and with other nation states. Thomas Paine said that once free of Britain, we could sell our wares to any nation in the world. Freedom of commerce in America is a tradition that goes hand in hand with other personal freedoms.

One of the best positions to be in these days, seems to be one of our former foes. Japan and Germany come to mind. Iraq seems to be getting better every month. After we get finished destroying you, we always try to dust you off, stand you up, and send you on your way. We believe in the freedom and ability of commerce so much, that after destroying your country we will help rebuild it, on our dime. Combining freedom from tyranny along with freedom to work is a powerful combination, one which we have used to our advantage.

As Americans, we understand that personal freedom is expressed in our freedom to work and play as we see fit. The products of that work are sold and the proceeds then stored as money in banks. Banks not only store the money, but perform the important function of moving money around in the financial system though loans. They move the money between companies, individuals, and even nations, all while taking a percentage.

The question has been asked, what happens when that money stops being directed by independent banks, but is controlled by the government. The answer to that is that politics directs the flow of money, not the indeterministic calculus of risk management. Nothing good can come from government control of banks. Business for banks is hard enough, without having to deal with another powerful, vocal, and flighty partner who listens to the cycle of news and not to the bottom line. Many banks are starting to realize that and starting to pay back the loans from the government. It appears that many of them did not realize they were not making deals with another bank. The guys across the table probably looked and talked like bankers, but most bankers don't have the ability to print as much money as they want. When a bank gets a loan paid back, that means they made money and can loan out the money again making even more money. When the government gets a loan paid back, all that means to them is a loss power.

An even darker question is: If you were going to undermine the capitalist freedoms of our great nation, where would you start?

Lord we pray for the ones running the banks to see the proper path towards freedom and independence, we also pray that their lenders are good, just and do not abuse their power. May you guide us and keep us through the tough times and help us to remember that you are the giver of all good things during the good times.

Man of Issachar

No comments:

Post a Comment