So the government is now in the banking and insurance business. Are autos and imports next?
Through the stimulus plan and interventions in the markets the government is now the lender, spender, and investor of last resort. In order to keep the financial gears greased the Fed has been manning the pumps.
But I hope that somebody over there has studied their history, because all this government intervention is starting to remind me of Japan, Inc.
In the ‘80s, the Japanese government was an inside partner to a whole host of critical industries. They thought that by careful planning and selectively intervening they could manage their economy to a better tomorrow. At first it seemed to be working. But around 1990 the wheels came off and the Japanese economy has stagnated ever since.
I understand that lawmakers want to do something, and some kind of new regulation is surely needed. But I don’t think America, Inc. will be any more successful than Japan, Inc. And I really hope the folks in Washington and New York remember.
Douglas R. Tengdin, CFA
Chief Investment Officer
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