Individual investors were not the problem
Paul Krugman’s column is off the mark of how to avoid a future financial crisis, and is a disservice to all investors [“Employment crisis demands action,” Opinion, syndicated column, Dec. 1].
Krugman would have us believe that investments made to save for college, a home, a business, retirement or to try to live off retirement savings is a socially useless activity. That only a long-term buy-and-hold strategy should be encouraged by the government, and any investment strategy short of that should be taxed and discouraged.
Yet the last decade has taught investors that long-term buy-and-hold does not work, that waiting for more than a decade to maybe get a return on an investment is a fool’s game, and that shorter-term investment horizons are needed in order to reach one’s investment goals.
To punish investors who choose not to suffer a long-term buy-and-hold strategy would be to discourage many socially useful activities.
The financial crisis wasn’t caused by investor transactions. It was caused by the creation of a mortgage security bubble that had little underlying value through the failure of federal regulators, by bond underwriters making less-than-honest appraisals of value, and investment banks using excessive leverage. It wasn’t caused by the average investor buying and selling a stock or mutual fund.
I’m baffled that Krugman would focus on punishing individual investors as opposed to fixing the real causes of the financial crisis. His approach is misguided.
— David Street, Ferndale
You can’t keep pushing failed ideas
Paul Krugman’s worrisome argument appears wrong, and is following in the tracks of the Obama administration’s failed policies.
Krugman described two options to help bolster the job outlook, one of which is to start another New Deal work program to create more low-paying, low-skill jobs, exactly the opposite of the family-wage and high-skill jobs we need.
He cited a price tag of $40 billion a year for the next three years, and claims this could create 1 million jobs. This equates to $1.2 trillion. Great idea — let’s spend 8 percent of our GDP to create jobs for .3 percent of our population.
It seems the liberal thought process is to keep pushing failed ideas until they finally work.
Government intervention is not the key to job creation. Supply-side economics is the best way to create lasting jobs. Tax breaks make it easier for existing businesses to grow (aka hire more employees) and easier for entrepreneurs to start the big companies of tomorrow (aka create more employers).
It’s time to stop vilifying the free market and let American ingenuity lead us back to greatness.
— Donald Bricker, Lake Tapps
