When I read the Op-Ed titled “How Hedge Funds Held Argentina for Ransom,” at first I thought The New York Times was publishing an April Fool’s joke. Once I got into the meat of the piece, though, I found out that I was wrong. The Old Gray Lady was continuing its chorus of anti-hedge fund, anti-capitalism, pro-big government and responsibility-shirking with a piece by Martin Guzman and Joseph E. Stiglitz on how “greedy” hedge fund managers took advantage of a country that could not pay its bills or act responsibly fiscally.
These two leading thinkers of our time have clearly bitten off more than they can chew with this latest rant on how hedge funds have wreaked havoc on the economy of Argentina because they actually demanded to be paid for the debt that the country issued and defaulted on. Mr. Guzman and Mr. Stiglitz suggest that other “vulture” investors will use the Argentina trade as a model on how to exploit large profits from small investments by holding out and getting paid based on the bond issuance figure, rather than on a deal struck by a government reneging on its commitment. Read the article here. And while I agree the return was staggering, the reality is that the hedge fund took the risk and should be paid. The fact that they held out and got what they wanted is not something that they should be criticized for, but rather something that should be applauded.
I just don’t get it: When do people have to take responsibility for their actions? At some point don’t people have to stand up and say yes, we borrowed and spent the money and therefore we need to pay it back? Or as Mr. Guzman and Mr. Stiglitz suggest, is simply OK for sovereign nations not to honor their commitments simply because, well, they are sovereign nations?
I don’t think so. As we all know, fish rots from the head and if the government defaults on its debt, why then wouldn’t people do the same? These so-called vultures may have made a lot with a little, but they also are simply forcing the government of Argentina to take responsibility for its actions. It seems rather simple to me, but what do I know? I’m not a professor at Columbia, a senior fellow at the Center for International Governance Innovation or a Nobel Prize winner in Economics.
THINGS THAT DRIVE ME CRAZY
Why is it that people don’t listen? People simply do not pay attention anymore and it bugs me no end. I am sick and tired of people looking at their phones and doing whatever it that people do with their phones in the middle of conversations. I know it is not simply because I am not engaging. Of course not. On the contrary, I am quite engaging. I think it is a lack of focus by people who are other directed. Put the phones down, people, and pay attention – you may actually enjoy concentrating on one thing at a time.