Govt told to let markets do their work

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Govt told to let markets do their work

Manipulating prices will prolong problems

Published: 28 May 2012 at 00.00
Newspaper section: News

The government should stop intervening in the market as its actions cause more harm than good, a corporate leader said.

Prapoj Nanthawattanasiri, an adviser at the Saha Pathanapibul conglomerate, said if politics leads economics, market forces will be ruined.

He was speaking yesterday at a discussion on the rising cost of living organised by the Thai Journalists Association.

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spiceman
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Discussion 12 : 29 May 2012 at 03.4012
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Khun Hawaiiman #11, at the peak of the long period of "Boom," Democrat politicians forced banks to lend to low-income minority, who were their constituents, they thought were being left behind. The banks would only do if if they had guarantee from the Govt to cover their back. This is where Free Market mechanism broke down completely and was the beginning of the 2007 Global Economic Crisis. To his credit, GWB told the Democrat-controlled Congress to tight up lending regulation but to no avail, as he was unceremoniously labelled as being against poor people to own homes. Of course, by then, the Credit Swap Derivative scheme had become incredibly big, spreading worldwide, and was becoming increasingly unstable. If the lending regulation were obeyed, the "toxic assets" would not exist, and there wouldn't be 2007 Global Economic Crisis. But again the Credit Swap Derivative scheme had grown so huge to become a "Frankenstein Monster," that it would take less and less of human imperfection of breaking the rules, to implode it like a gigantic house of cards. So, if the collapse didn't happen in 2007, it would surely happen later. Lesson? Any system that depends on human beings to be perfect is doomed to fail, because we are anything but perfect!
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hawaiiman
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Discussion 11 : 28 May 2012 at 22.1711
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D-8 the sub prime mortgage fiasco was a combination of causes, yes the easier lending to low income folks was a factor, but the gasoline on the fire was "securitization of subprime"with scdos. These instruments encouraged lenders to write the highest risk loans possible, and spreadthat risk world wide. Cdos and scdos are still not properly transparent and regulated due to lobbying from the banks.
I do agree that banks should just lend, that would mean going back to the rules that kept banks and investment firms separated.
You are jumping around here, dragging Obama into it, but with an election coming on, I guess that is to be expected.
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franklin
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Discussion 10 : 28 May 2012 at 20.5710
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This is the government that thinks money is the solution to everything. Use money to influence the voters, use money to control people and now use the people’s money to subsidize and try to control the economy. They couldn’t bribe ‘Mother Nature’ during the floods and they certainly can’t bribe the Thai economy through subsidization without eventual negative results.
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spiceman
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Discussion 9 : 28 May 2012 at 16.399
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Khun Hawaiiman #6, but what would you do when private bankers, politicians through their friendly Govt regulators are sleeping on the same bed, as they did prior to the 2007 Global Economic Crisis. I rather stick to the old fashion Free Market system where bankers lend, Govt regulators regulate, and politicians get their dirty hands off the whole thing. If the bankers made bad loans, they lose money, and absolutely no bailouts from the taxpayers. Otherwise, bankers will continue to make risky loans, knowing that their political friends in high places will continue to bail them out, and taxpayers got screwed again, and again. It's not very "Free Market," isn't it?
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spiceman
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Discussion 8 : 28 May 2012 at 15.398
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Khun Bill #3, there are many factors that contributed to the 2007 Global Economic Crisis, like deregulation signed into law by Bill Clinton, or lack of supervision under GWB. But the one that finally set in motion the beginning of the end, was subprime mortgage fiasco, created by Democrat's controlled Congress toward the end of GWB's second term, aiming at helping poor people to buy houses by loosening up lending regulation. And when those poor people defaulted on their mortgages totaled about $700 billions, the whole system came crumbling down. Of course, Obama made it worse by betting on gigantic Govt spending programs, hopping to turn the US Economy around. Well, it didn't work, and things have gotten a lot worst since then. Free Market doesn't mean absolutely no regulation, and this is the reason why!
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dao
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Discussion 7 : 28 May 2012 at 15.067
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Intelligent market intervention can help but this government is just trying to cover up its incompetence by playing with the market .They should stay as far from it as possible .Just look at rice .
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hawaiiman
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Discussion 6 : 28 May 2012 at 11.546
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Capitalism controls prices through endless boom and bust cycles. Those who have money to invest are taught "sell it high" and "buy it low" this creates a system where wealth is constantly extracted from the bottom to flow to the top.
Government has the duty to promote the interests of ALL the people. Government priorities must therefore take precedence over market forces. The economy is the engine of society not the driver.
To use another analogy, a gentle hand on the reins, but don't eat the horse.
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Eric
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Discussion 5 : 28 May 2012 at 11.345
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I would argue that price control for consumer products will not distort market force and increase inflation. The theory that lowering price using price control will encourage demand and exacerbate inflation pressure will hold true if supply is rigid. However in Thailand case, the supply rigidity are due to post flood damages and recent hot weather and supply will improve moving forward. Price control smooth out the this rough weather affected price increases and has helped the marginalized people and stop social unrest. However I will agree that energy price should not be subsidized.
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hillfarang
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Discussion 4 : 28 May 2012 at 10.534
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"Prapoj Nanthawattanasiri, an adviser at the Saha Pathanapibul conglomerate, said if politics leads economics, market forces will be ruined."

It may sound good, "let free markets alone..." but we've seen the history of capitalism 'gone wild' either the USA monopolies of 100's years ago or today's cannibal capitalism which just benefits the rich, Wall Street, insiders & leaves the workers & poor people on the sidelines.

Intelligent regulation is required, not complete "hands off..."
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khunbill
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Discussion 3 : 28 May 2012 at 10.503
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These guys should learn a lesson from the USA. governament didnt interfere in the 2000s with wall street and financial insitutions and look what happened. Of course the big question is the Thai government competant enough to deal with it
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