Bush: Global Agreement on Regulations Necessary
U.S. President George W. Bush said Saturday that the international community or, at the very least the leaders of the developed and prosperous world, have to agree on common principles to reform regulators, if they want to prevent global economies from crashing.
He called on the participants of the upcoming global summit on the economic crisis to “recommit” to the principles of free enterprise and free trade.
The summit will be held November 15.
“In recent weeks, concerns about the availability of credit, the safety of financial assets, and the volatility of the stock market have made many families understandably anxious about their economic future,” Bush said in his weekly radio address.
“This crisis is global in reach — and addressing it will require further international cooperation,” Bush said.
“Specific solutions pursued by every country may not be the same,” Bush said, but warned that rejecting “proven methods for creating prosperity and hope” now would be foolish.
Free enterprise and free trade “have shown themselves time and time again to be the surest path to creating jobs, increasing commerce, and fostering progress,” the president with an MBA from Harvard Business School said.
He went on to warn governments against isolation. The world continues to globalize, Bush argued, the only way for countries to succeed is to accept that reality, and to make free trade and free enterprise easier rather than harder.
The main lesson many politicians seem to have learned from the current crisis is, for a large part, the wrong one: especially in Europe, governments are quick to nationalize just about every financial institution they can nationalize, and have proclaimed time and again in recent days and weeks that ‘capitalism’ just suffered a tremendous blow.
Interesting about that is that ‘capitalism’ has not been practiced in Europe for decades, a century perhaps even. The largest part of the 20th century, at the very least, was not capitalist in western Europe but Social Democratic. If it truly were capitalism that caused today’s crisis, we would not be suffering as much as the United States, let alone more (the U.S. may get into a recession, quite some European economies have already entered one).
No, there is more going on here than ‘capitalism run amok,’ and Bush is right to point out that the old, traditional values of free markets and free enterprise have brought forth more prosperity than the concepts and principles adhered to by Social Democrats, who, in the end, need capitalism and free markets in order to pay for their large projects for society.
Whenever there is a global meeting to coordinate economic policies, especially under emergency conditions, it seems to become fodder for conspiracy theorists. I have already heard the wild-eyed tales about how this meeting will lead to a global conspiracy to use a single currency which will….um….somehow lead to the elimination of all freedom in America and the imposition of a dictatorship. Or something.
:rolleyes:
I would argue that the nationalization response is not necessarily wrong, as long as it includes provisions to return the nationalized institutions eventually to private ownership. Temporary nationalization and other government-centric emergency response techniques have the ability to shift large amounts of illiquid debt into hands — the government’s — that can hold it longer with fewer deflationary side-effects than private entities can.
A key line from my lectures on this subject has been to point out that capitalism is a good theory, but it is not a religion. As a good theory, it has provided superior guidance for how to achieve long-term economic growth than other theories like socialism. But every theory, even the best, eventually encounters conditions where it will fail to provide good guidance. A “little temporary socialism” may be necessary to save capitalism and we should not let a religious fervor for free-market fundamentalism lead us into an abyss.
“U.S. President George W. Bush said Saturday that the international community or, at the very least the leaders of the developed and prosperous world, have to agree on common principles to reform regulators, if they want to prevent global economies from crashing.”
I agree with him there. I am skeptical about what any such agreement would be. My guess is that any agreement will be quite vague and each of the participants will basically do what they would minus such and agreement. Here’s to hoping I am wrong.
Jason,
Who is putting forth the wild conspiracy theories. I am not doubting they exist. I am just curious what quarter they are coming from. I assume (hopefully rightly) that it is just coming from some fringe cranks.
I also wanted to point out that I agree with your second comment. I generally don’t bother to comment if what I wanted to say has already been expressed, but our rather forceful disagreement on another thread caused me to rethink that attitude here.
Cheers
I cannot help but see great irony. At this point in time in the world financial crisis, it appears that the US is starting to recovery. Or better put, as evidenced by a renewed faith in the dollar, the world is now seeing the US as the stable place to put your money. Meanwhile, Europe is now seriously struggling.
Wouldn’t this be a wonderful opportunity for that US President who has so consistently been criticized for “going it alone” to thumb his nose at the world, and Europe in particular. Instead he facilitates the convening of many nations to find mutually beneficial solutions.