European bankers, who only a week or so ago told us that their institutions were by and large immune from the troubles in the colonies, now are singing a different tune.
Europe moved to shore up more teetering banks Wednesday, as officials struggled to answer a basic question: How did their highly regulated banks, many of them state-owned, get suckered by the same speculative investments that have flattened Wall Street?
Now the interesting thing about that, of course, is more regulation is precisely what Senator Obama is advocating, and he criticizes McCain for advocating deregulation
After the House defeated a bill Monday to bail out the financial industry but also impose new federal controls on it, the Democratic presidential candidate said that McCain has "fought against commonsense regulations for decades, he's called for less regulation 20 times just this year, and he said in a recent interview that he thought deregulation has actually helped grow our economy."
But over the last 40 or 50 years, the US economy has grown much faster then the more regulated European economy, and it has proven that it is not immune from the the current economic situation even though it has more banking regulation.
So which economy is Senator Obama talking about? What is the evidence for his position?
Capitalism requires more than anything transparency in the markets: Accurate and complete facts must available to everyone who wants to invest. This is why there are laws against insider trading.
So regulation that increases sunlight, such as those proposed in 2003 and 2005 which were opposed by the likes of Barney Frank and Senator Dodd among others, is regulation that is useful.
This is the type of regulation that McCain supports.
The type of regulation that impedes businesses from competing and being competitive are not useful and in fact are clearly hurtful. This is the type of regulation that McCain opposes.
So what does Senator Obama mean by "commonsense regulations"? Which type of regulation is that?
Obama continuously accuses McCain of supporting "tax breaks for companies that ship jobs overseas." Presumably Obama would support regulation that makes it harder for companies to "outsource" jobs to other countries.
But many countries outsource jobs to the US.
German companies have the greatest number (12) of high-income U.S. subsidiaries, followed by Japan (nine), then Swizterland and the Netherlands (six each). All of the companies that appear on the list are from Europe, the United Kingdom, Japan or Canada, with the exception of Bermuda-based Tyco International (nyse: TYC - news - people ) and South Korea's Samsung and LG Electronics.
The five firms with the most revenue from their U.S. operations in 2006 are: BP Global ($107 billion), Royal Dutch Shell ($80.9 billion), Daimler AG ($80.2 billion), Toyota ($65.7 billion) and HSBC Holdings ($61.7 billion).
So how does Senator Obama expect to encourage more of this when he won't allow US companies to reciprocate? More importantly, how does he expect US companies to compete globally if he is going to micromanage their structuring decisions?
I'm thinking this type of regulation is unhelpful.
Obama proposes closing corporate tax "loopholes". Loopholes are ways in which people and corporations avoid taxes by doing something that gives you a tax break.
You know, like investing in Green technologies.
Clearly some "loopholes" are not useful, but some are there to promote certain objectives that we as a country deem worthy of promotion.
So Obama should stop talking in generalities and tell us which loopholes he wants to close and which he wants to keep. And what new ones he is promoting.
Tax breaks and loopholes are equivelent in many cases. So Obama needs to explain why he thinks that tax breaks for "Big Oil" is a good idea.
We do and should regulate the economy. Government should assure that there is transparency in the markets and a level playing field for investors.
Government should not be telling businesses how how to run their business anymore than Government should tell business what to produce.
Which type of regulation does does McCain support?
Obama?
