Many people ask how lawyers can advocate for a position they don’t believe in or, for criminal defense attorneys, advocate on behalf of someone they know is guilty.
And then we have the case of U.S. government officials advocating for deregulation of the financial sector in China. Tough sell. I’m glad to be in the private sector.
From the NY Times:
Bush administration economic officials, frustrated over the pace of change in China, warned Chinese leaders Tuesday not to let American regulatory failures in the subprime mortgage crisis become an excuse for not deregulating Chinese markets and opening them to foreign investment.
Right. Because deregulation of the financial markets has been such a resounding success in recent years, first with the S&L fun and games in the 1980s and the recent mortgage debacle. Great argument.
It gets better. Apparently the latest round of the Strategic Economic Dialogue (SED) resulted in mixed messages being sent to the Chinese side, or perhaps Beijing just prefers to see things in a favorable light.
After hearing from Mr. Bernanke and others about efforts by American companies to recover from the crisis, Mr. Zhou said he was impressed that many shaky American financial companies had increased their capitalization in recent months, as both Mr. Bernanke and Mr. Paulson had urged them to do.
The American side did not give any details on Mr. Bernanke’s presentation, but Mr. Zhou said the overall session was “something we have never experienced before,” in that the discussion focused on the “inadequacy of regulations” governing subprime mortgages and other complex financial products.
The implication taken away by the American side was that he was telling them that deregulating Chinese financial markets, as demanded by Wall Street and the Bush administration, might bring unwelcome consequences.
I guess it all depends on your point of view, huh?
American delegates cautioned that China would be wrong to slow its deregulation of financial markets or to ease up on opening them to foreign investment, said Alan F. Holmer, special envoy for China under Secretary Paulson, who is leading the American side in the talks.
“There are lessons to be learned from the economic developments in the U.S.,” said Mr. Holmer, adding that “there would be significant costs to China if they were to slow down with respect to their financial sector liberalization.”
I’m sure that there is a credible argument to make here that continued deregulation, with respect to certain aspects of the Chinese financial system, is a good idea. But once again, the message is getting lost, at least to some degree, because of the identity of the messenger. You send Americans over here to preach deregulation at a time when the U.S. financial sector is in crisis, in part because of a lack of government regulation and oversight — well, it certainly doesn’t shore up the argument very well.
This reminds me, and not in a good way, of yesterday’s post on the Rule of Law. The U.S. needs to clean house and establish some moral authority on some of these issues. And there is a long list of issues. After the U.S. Congress recently passed an atrocious Farm Bill that includes huge sums for agricultural subsidies, it’s even hard these days for Americans to push free trade.
I promised yesterday to stop with all the U.S.-related posts. Guess I lied.