http://www.theaustralian.news.com.au/story/0,25197,25254410-5013871,00.html

KEVIN Rudd has defended the power of free markets to drive economic growth despite having savaged "extreme capitalism" as the source of the global recession.

Visiting the New York Stock Exchange overnight the Prime Minister said the world needed to restore proper balance to capitalism to ensure working people shared in its benefits.

I think what we’ve seen in the events of the last 18 months is where the balance was got all wrong and it’s time to restore the balance," Mr Rudd said. Earlier this year Mr Rudd wrote a 7700-word essay published in The Monthly magazine in which he attacked extreme free marketeers and "neo-liberals'' as having triggered the global financial crisis.

Since then, he has drawn the Opposition into his rhetoric, attacking Malcolm Turnbull as a neo-liberal whose attitude to the free market is to "let it rip''.

 Early today Mr Rudd walked down the very centre of global capitalism - Wall Street - and lunched with the NYSE board and a group of company chief executives.

Later, asked whether he had shared his views on neo-liberalism with his hosts, Mr Rudd said he had always had faith in free markets as drivers of wealth and producers of tax revenue which governments used to deliver public services like health and education.

"What I was talking to our hosts today about was the need to get regulation for the financial markets for the future right and globally co-ordinated," Mr Rudd said.

 "The US has said there is a problem with the lack of comprehensiveness and co-ordination with its overall national regulatory arrangements for its financial markets."

He said US Treasury secretary Timothy Geithner had said this week he intended to change direction with stronger regulation.

And the Prime Minister said leaders of the G20 nations meeting in London next week needed to agree on ways to "get the balance right" through regulation of finance markets. "

In the global economy of the 21st century there is a very, very rapid connection indeed between what happens here on Wall Street and what happens in the main streets of Australia," Mr Rudd said.

"What happens here on Wall Street directly affects jobs and construction along Parramatta Road in Sydney, on Brisbane’s Queen Street Mall. "The interconnectiveness of the global economy is such that we have to deal with all of these problems globally because all their implications are felt locally."

Mr Rudd said he had spent his whole political career defending free markets but believed proper regulation could ensure that working people also received benefits of the prosperity they could produce.

As Mr Rudd visited the stock market his wife, Therese Rein, visited a school in Harlem for impoverished children.

Yeah, unfortunately Wall Street is going to find things come around and bite them in the ass for all this in terms of future regulations. While I don't think that Congress will pass any abusive legislation, the average person has no sympathy for Wall Street right now and wouldn't care if Congress did pass some pretty obscene stuff. The recent bonus debacles made it only worse for them.

Leave Capitalism alone! Leave it alone! *cry's fiercely as I stay into a Youtube recording session*

It's like it's always been. A few kids act out and the entire class gets punished.

Now, in actual teacher training, they tell you that's an extraordinarily stupid strategy because it takes away the incentive for good behavior, and erodes the students' confidence that you're a fair teacher...

But legislators don't have to be trained.

We don't need more laws. We need smarter laws that are enforced properly.

Wall street screwed up. Guess what? They should be out the most money. Banks screwed up. They shouldn't of got a 'get out of jail free' card from Uncle Sam.

Where's my bailout when I decide that I bought too much Taco Bell and didn't have enough gas money to get home from work?

Thats a very stupid analogy. You not getting home from work isn't going to cause the entire financial system to collapse.

The only way to get out of the crisis is for the banks to start lending normally again, thats not going to happen if all the banks are bankrupted because of the crisis.

Er... if his not getting home from work would cause the entire financial system to collapse, then it wouldn't be an analogy at all.  It would be the thing itself.

An analogy is a comparison of unlike things; that's, in fact, the very point to comparison.  And while personal financial decisions (like Taco Bell) might not cause the country's markets to fall... they could destroy a family's budget.  And, in that way, be analogous.

His point is that, when people make bad decisions, they ought to be the ones to suffer for it.  And you might disagree with that.  But I think his analogy was fine.

I'm honestly not sure how to get out of the crisis.  Actually... I suspect that no one really knows.

However, I'm not sure what "lending normally again" means here.  Frankly, I'm a little ignorant of this whole affair... but wasn't part of the problem too much easy credit?

Thank you, donathos. That was the point I was attempting to make.

My analogy is this: If I make a dumb decision (buy something I may not need) and suffer for it (run out of gas) I do not get bailed out for it. You may argue that my dumb decision wouldn't bankrupt the system, but no single action in this whole mess ever bankrupted the system, either.

In fact, the system is in the mess it is not because of one decision, but tens of thousands (if not millions) of homebuyers & credit card holders making dumb decisions - putting meaningless things (Taco Bell) before serious things (gas for work), and defaulted, causing the banks to hold toxic assets that won't be paid back. Because the banks hold such assets, they are being devalued since they....Aren't actually worth any value (too much liability by paying on things they've funded, with little income coming in from their investments).

And forgive me if I live by the idea that if debt got us into this mess, that more debt cannot get us out. We are only trading private debt for public debt. And both are still debt - We're just moving the burden from the irresponsible that caused the mess, onto the responsible that have funds still intact. I don't think that's a wise trade.

And I don't understand, Rath, if the banks went bankrupt because they were stupid....Why shouldn't they get hurt? Is our official motto being changed from 'Land of the free, home of the brave' to 'Get a handout, especially if your a retarded CEO'?

The reason it a stupid analogy is because in your example it shows only harm to the stupid person which is a case where a bailout should not occur. You're assuming the only people who benefit from these bailouts are the CEOs and banks, in reality the only reason they bailed them out was because to not bail them out would have disastrous consequences for far more than just the bank.

I agree that the banks have been stupid and need to be punished, I just don't think letting the entire financial system collapse is the way to punish them because that ends up punishing everybody.

Also debt can strangely get you out, if you want look at WWII for a precedent. Huge spending can revive an economy.

So we should only give bailouts when it effects more than 1 person, then? What about the person's loss of productivity since he was unable to get to work? That caused others issues. What if the person was a critical link at work, and caused the business to collapse while he was gone?

In effect, the government bailed the banks because of the borrowers stupidity of taking the money. They harmed themselves first, and now the government is buying up the toxic assets. This proves that bad behavior isn't really bad as long as it effects more than one person, hunh?

Also, you act as if the government did not bail out the banks that every lending institution was going under. They were not. There were many stupid banks that made bad decisions, but not all were in trouble. Credit Unions are still in great shape, as they didn't exploit the subprime crisis, and followed sound lending practices.