What changes do we need?

About $30 trillion of market value has been erased from global equities in 2008, according to data compiled by Bloomberg. Is that all because we did not regulate the mortgatge industry? In the late 19th century, we had faced problem for the rail road companies, and government stepped up and rescue them, after few years they rescued whole farming industry by grants. If any industry get bigger then open market has a significant factor on the economy and it need some level of regulation. We learn a lot for the short term, learn more for medium term and learn nothing for a long term.

There are few points I want to mention that I think does not work.

1. Rich getting richer: We moved from the economy from "opportunity for everyone" to rich getting richer. In the last few decade, huge amount of wealth is created. Usually, wealth is created by Intelligence and Hard work. It was not the case in past decade. People getting rich by housing, stock option and simply by speculation. As a result, it form a bubble of wealth, which we have seen bursted. In this down turn, the biggest loss was faced by the rich people and not the average Joe.
   
2. Deregulation: In late 20th century, governemnt implemented deregulation in various industry such as Telecom, Energy, Finance, Insurance, Airline. Telecom - Because of dereulation it gives huge opportunity to become success. Many companies has been created to take the opportunity. As a result it spurs growth. But at the end, only few big companies left AT&T, Verizon, Sprint. Similarly, in Energy, we have seen how Enron has manupilated the open market and in the same way how the crude oil has gone up. Finally Finance, investment banks has become very innovative in getting new product in the market - which no one understand the consequences. As a result, all the investment banks has gone. They have been converted to regular bank, so that it can be regulated. We know airline industry is also struggling and in merging phase. At the end you will see few companies and fewer competition and we as a consumer will have to take the hit.
   
3. Globalization: I cannot claim that Globalization does not work. But due to globalization, there is significant dependency that nobody knows the consequences of it. We have seen how the problem in Iceland, Argentina, Russia, and many more to come. Few years back when Indian PM, Manmohan Singh, interviewed on PBS. He mentioned that he does not want other country to participate and eventually manipulate in Indian Debt Market. Indian regulation such as Energy, Fianance is working very well. They regulate the Gas Price, Insurance, Banking Industries and it works. Their economy does not give much opportunity to create innormous amout of wealth that sustain longer time.
   
4. Semi-Socialism: We need to stop lobbying. We need to stop governement becoming socialist. Government is not only bailing out the company but they are now taking ownership in the equites of Finance Industry. Governement is writing big fat check to the companies like GM and Ford, who cannot compete with Japanese Car maker. Government has a strong relationship with the main street. Does this sound familer in other countries? Yes. China. When these companies were making big profits nobody bother to take big tax on them. We tend to be semi-social government. This was not capitalism, here tax payer are abused. Also we has a lot of companies has CEO also act as a Chairman of Board. How that company overlook what CEO is doing? I would never invest in company like this.
   

We have very big challenge ahead, and we need to change these policies. Leadership and Adivsors will determine the future of the country.