February 08, 2011

Mr Issa, then do something about it!

Sir, Darrell Issa writes that “assuming government can allocate resources and spur growth more effectively than market forces is a mistake America must never allow to happen again” “Obama´s Keynesian failures must never be repeated” February 8. He might not be aware that America and much of the world has hardwired such an assumption into their financial regulations.

When a bank is required to have 8 percent capital when lending to a small business or an entrepreneur, but does not need any capital at all when lending to the government, it is precisely that the government can put the savings of the nation at better use what you are assuming. And the US Congress recently passed 2000 plus pages of financial regulatory reform without showing the slightest intention of reneging on such an assumption.

For the umpteenth time, the current system of capital requirements for banks concocted at the Basel Committee is stealth communism.