The big business news of the day is the loss of around $2 billion by J.P. Morgan Chase today. Like Pavlov’s dog, big government liberals are tripping over themselves to push for more regulations of the banking industry. Something happened that most people don’t understand so the government needs to *Do Something* to placate the populace.
Why in the world is it the business of the Federal government to oversee the private transactions of private companies? If a company like J.P. Morgan Chase makes a bad bet like this there is already a system in place to deal with it. They take a huge loss, something that comes with the territory in capitalism. The stock likely gets pummeled, as will happen today. If things are really bad the board of directors will make changes, which will not happen in this case. Worst case scenario a company folds and is replaced by another player. It is messy but it is the way that the private economy thrives.
The alternative, a position favored apparently by people like Carl Levin and the President, would have endlessly increasing “oversight” by the same people who brought us the Fannie Mae/Freddie Mac debacle and $14,000,000,000,000 in unsecured debt. The same organization that is the very model of incompetent leadership, frivolous spending and inefficiency.
Let me lay it out for you. The 2011 budget has a deficit of about $1,500,000,000,000. There are 365 days in a year. So that works out to about $4,000,000,000 in deficit spending every single day or twice what J.P. Morgan Chase lost in six weeks. While the Federal government is $14,000,000,000,000 in debt with no plan to dig us out of the that hole, Chase will still make, IN ONE QUARTER AND EVEN WITH A $2 BILLION LOSS, around $4 billion in profit! Read that again. Even with this enormous loss Chase still makes billions in profit in this quarter at the same time that the Feds for hundreds of billions deeper into debt.
Who do you trust to know what they are doing, the people making billions in profit in spite of a big loss or the people who are going to spend hundreds of billions in deficit spending with no plan and no prospect of paying it back? When it comes to losing money, JP Morgan Chase can't hold a candle to the Federal government.