Privatize the Profits, Socialize the Risk
When times are good, Wall Street wants the government to get out of the way so that the market can “work.”
Translation: Privatize the profit.
When times are bad, Wall Street wants the government to step in and play a role in the economy.
Translation: Socialize the risk.
If you watch, you can hear this philosophy reiterated subtly again and again by business executives.
“The biggest thing I see here is the incredible pessimism. The government is doing a lousy job of alleviating fears.” – Keith Springer, president of Capital Financial Advisory Services
During good times, these same financial advisors were encouraging the government to step aside so that the market could work.
The more you see it, the more you realize that it’s not a double standard, but rather what Wall Street expects the role of the government to be: privatize the profit, socialize the risk: subsidize businesses and deregulate during good times, distribute the losses and take responsibility during the bad.
And, in Wall Street’s defense, if they can get away with it, why not keep asking for subsidies?
