Friedman talks sense about capitalism and risk-taking. Will Congress, a major catalyst causing this crisis, and a new President listen? I certainly hope they do.
"Don’t get me wrong. I am not criticizing the decision to shore up the banks. And we must prevent a repeat of the reckless bundling and securitizing of mortgages, and excessive leveraging, that started this mess. We need better regulation. But most of all, we need better management.
The banks that are surviving the best today, the ones that are buying others and not being bought — like JPMorgan Chase or Banco Santander, based in Spain — are not surviving because they were better regulated than the banks across the street but because they were better run. Their leaders were more vigilant about their risk exposure than any regulator required them to be.
Bottom line: We must not overshoot in regulating the markets just because they overshot in their risk-taking. That’s what markets do. We need to fix capitalism, not install socialism. Because, ultimately, we can’t bail our way out of this crisis. We can only grow our way out — with more innovation and entrepreneurship, which create new businesses and better jobs.
So let’s keep our eyes on the prize. Save the system, install smart regulations and get the government out of the banking business as soon as possible so that the surviving banks can freely and unabashedly get back into their business"
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