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OPINION Joe Meeker, Opinion Editor The risky business of our biggest banks Joe Meeker creation of the Troubled Asset to prevent it. This leads to our economic system is that forms. First, we could place Opinion Editor Relief Program, which bought the creation of “perverse you’re allowed to take risks if incredibly strict regulations these securities at face value incentives.” Because banks there’s a potential for payoff. on banks and their activities. Our nation is currently in to help relieve debt. feel like they will never fail, But parties must be aware Limit them only to commercial the midst of one the greatest Why would banks take such they are more willing to take of their potential benefits operations, put in place the financial crises in its history, risks? Banks, of course, do not risks than they otherwise and consequences. Things consumer protection program, and over and over we find want to fail. From your corner would be. a re d i f f e re n t re-evaluate our lending laws. our financial institutions— bank to the biggest in f o r b a n k s , This would require sweeping namely the big banks—to especially large reform. be responsible. banks. When Our current system of With little regulation large banks regulation is patchwork to constrain them, engage in risky and inefficient. Regulation, our banks engaged in behaviors— especially of new markets such risky behaviors and hedge-fund as derivates, is difficult, due to neared collapse. Banks i n v e s t m e n t , overlapping responsibilities of are economic engines, taking loans which agencies. We replace the duties p r o v i d i n g c r e d i t , any rational person would of the SEC, FED, etc., with one facilitating investment see are inherently flawed, powerful oversight body that and keeping the wheels investing in unregulated might adapt to changes in the of economics turning. financial derivatives such as financial system. When banks collapse, mortgage-backed securities The other is to limit the t h o s e w h e e l s s t o p out of a belief that a bubble size of the banks, pure and turning and we spiral would never burst—they are simple. Cut them down to into a recession. Thus, to fundamentally endangering some government-determined ensure future economic the American people and the point, at which their failure stability, we must act financial system. would no longer spell doom for now to keep our banks There are two main our economy and our liquidity. functioning. If we are to theories as to the And were we to finally say, ensure that we never see continuation of the “Hey, you’re not safe anymore,” a repeat of the actions relationship between if we were able to eliminate the of ’07 and ’08, we must the government and perverse incentives created by enact strong reform that the banks. government intervention—the attacks the problem at its One, the Addicted problems with risky behavior source—risky behaviors Gambler theory, might solve themselves. on the part of banks and i s t h a t t h e A strong stance from the perverse incentives. government will government would go a long How, exactly, did banks continue to bailout way in protecting the interests create this crisis? Banks, the banks, now and of the American people. To in the 2000s, engaged forever. As it was in be clear: irresponsibility on in some incredibly the beginning, behalf of financial institutions risky lending practices, is now and ever should no longer be a cause including administering shall be. The of our economic woes. Real, NINA Loans—Loans that other foresees sweeping reform is needed if one can recieve with “No some day, far into we are to protect ourselves Income and No Assets”—and America, no bank wants to go The banks—and excuse the future, where we finally let and our interests. investing billions of dollars in under. But the big dogs, the me this metaphor—want to the banks fail, destroying our Big is fine. But the moment a the unregulated derivatives ones who truly have influence have their tasty derivatives financial infrastructure but bank becomes “Too Big to Fail,” market. This includes on the American economy, cake and eat it with the fork giving us a clean slate. and where their potentially “mortgage-backed securities,” know failure is impossible. of government aid. And you I reject both of these theories. risky behaviors endanger which were made worthless They know that their collapse simply cannot have it both I believe that, with proper the well-being of millions of when the real estate bubble would be so detrimental to ways. Risk is a part of life and regulation, we might eliminate Americans—that is just too burst. It was these billions of the American economy that a part of capitalism. The great the need for bank bailouts. This big. Too big to fail is simply dollars in debt that led to the the government will step in thing about this nation and regulation would come in two too big to exist. Help out Haiti; But has the United States forgotten Cuba? Jamie Warner the CIA World Factbook, 80 United States. It is within our then they might have been neighborhood, and we did not Columnist percent of the people in Haiti sphere of influence, the area able to resist the Communist give them support before it was are below the poverty line, and of proximity to the U.S. that influences. The same process too late. However, there are The response to the recent more than two-thirds do not we can significantly affect. could happen to Haiti. It is a other countries in a situation Haiti earthquake was generous have formal jobs. An unstable country so close poor, unstable country, so it is similar to that of Haiti’s, and widespread. It is the poorest country in to the U.S. is also a safety highly susceptible to modern- before the quake. Take Cuba, However, there was a the Western hemisphere. If we concern. day threats against the U.S., for instance. Soviet Russia disaster in Haiti even before had donated to Haiti before the Consider the Cuban Missile like terrorists. The U.S. had a was its primary economic the earthquake happened. earthquake, then the donated Crisis, where Communists motive to help Haiti and also support, giving Cuba $4 billion Donations and support should money could go to improving had a strong influence over had a strong influence over it, to $6 billion each year. Since have been given earlier. infrastructure and building yet we failed to act in time. The Soviet Russia collapsed, Cuba Preventative measures should stability instead of to result was a disaster, and we has undergone an economic be taken currently in similar repairs and medical can only try to repair it. collapse. In addition to that, countries like Cuba, where support. Do not We have made our it has problems with human a crisis like the one in Haiti get me wrong, mistake with Haiti. trafficking and drug trading. could emerge. t h o u g h — t h e They are Cuba, like Haiti, is our Benjamin Franklin said, donations so far were very in our neighbor. They both are “An ounce of prevention is helpful and generous. Cuba. They managed undergoing severe economic worth a pound of cure.” Earlier However, earlier donations to put nuclear missiles and social problems. We can donations would have helped would have saved lives. These there, making a large threat only repair Haiti for the time Haiti improve its infrastructure, lives also are not in a distant to the U.S. If the U.S. had being, but we might be able to reducing deaths. According to country; Haiti is close to the made Cuba more stable, save Cuba. Page 4 The Purple Sage February 17, 2010 OPINION THE uotable WEDNESDAY SOCIETY speaks UOTE Karma affects us all Though epigenetics is a cutting-edge field of study, there is significant evidence to suggest that, in the ultimate form The word “karma,” while often tossed about popular culture, of karma, what we do today and for the rest of our lives can Q actually refers to a rather esoteric, grounded life-view held come back to haunt or help our children. in many cultures. Christians may quote Galatians 6:7, which Do not, however, make the mistake of thinking that karma, says, “A person reaps what he sows” and Confucianists may good or bad, will not return in one’s lifetime. Take, for You know refer to Confucius’ quote that, “What you do not want done example, a simple visit to Kokopelli Cafe. to yourself, do not do to others.” In the book “Kindness, One morning this past month, I blearily rolled out of bed, Clarity and Insight,” the Dalai Lama put it quite clearly, pulled on sweatpants and made the trek to school. I knew you’re in saying, “The effects of karma (actions) are inevitable...we extra caffeine was going to be a must that day, and I was “ have accumulated negative karma which will inevitably have quite looking forward to receiving my tea. I stumbled into love when its fruition in this or future lives. Just as someone witnessed Kokopelli during passing time, ordered tea and rummaged by police in a criminal act will eventually be caught and in my purse only to find that I was a quarter short of the you can’t fall punished, so we too must face the consequences of faulty necessary amount.

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