Joe Nocera, who has been blogging intermittently at the Times, decided to cede the floor to Cliff Asness, the managing partner of AQR, a $30 billion hedge fund. Asness sounds off on the prohibition against short-selling:
Frankly, I expect some confused socialism from the Brits, but not from our “small government” Republicans (for the record, on matters of economics, I consider myself from the small-government libertarian wing of the Republicans). I now feel quite party-less as I’m reasonably sure Obama would’ve nationalized all industries in similar circumstances, while “hoping” this “change” would work.
Now, after executing the short-sellers in a show trial, the S.E.C. chairman, Christopher Cox, and Treasury Secretary Henry Paulson are probably going to review a parade of soldiers and tanks with 10 old men in coats and big hats, and then perhaps go rest at their dachas in the Crimea. Then again, my socialism analogy, however accurate, may not be the best one possible. After all, I believe the last country to outlaw shorting was Pakistan.
So, while there’s a lot of blame for everyone to share, as usual a crisis caused primarily by government, is “solved” by more government. Some of it is probably needed now. But, in the case of blaming and attacking shorting, it’s very bad government and entirely not needed, quite the opposite.
So we take another step along the road to serfdom. I just hope the jump suit they make me wear at the re-education camp goes with my eyes.
Read the whole thing here.