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Originally Posted by zerospinboson
Why? They believe in the same thing you do. It's all about deregulation, the only difference being that they're in a position to line their pockets while doing so. It's not as if "Ron Paul x 535" would suddenly solve that, as he also believes in deregulation. Similar to "not having a health care system", using political positions for personal gain is only immoral if you call it that, and only illegal if you're obvious about it.
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It seems rather odd to blame deregulation for this particular basket of problems. More on this farther down.
Quote:
Originally Posted by zerospinboson
The only way to make sure this shit won't happen again is to regulate the system. If you don't, this will just keep happening [...] and the only way to ensure it won't indirectly kill you yet is to regulate them. (mind you, the regulation was firmly in place, and none of it would've happened if the deregulation that started in the 80s hadn't happened, so it'd hardly be "radical", even though the wankers on the radio whining that "american values are being thrown to the wolves" would have you believe otherwise.)
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Let's see here... Lots of economists and PoliSci types have been looking at the banking system trying to figure out what went wrong. It's far too soon for the analysis to be done -- after all, economists are
still arguing about the causes of the Great Depression most of a century later -- but there are some indications that may be relevant:
- Deregulation does not appear to be at fault. For example, relaxing the Glass-Steagal act (which previously kept investment banking separate from other banking) didn't cause it. On average the banks that have the biggest problems took least advantage of the rule change; those with the smallest problems are more diverse.
- The lax standards in mortgage origination didn't result from deregulation. Rather they came from changes in regulation, most notably much stronger requirements for loans made to marginally qualified (or even UNqualified) buyers -- the "financially disadvantaged." This is hardly "deregulation."
Oh fooey... you may find
this opinion article a good place to start reading on the subject. Although it doesn't give references you can use its points as search terms which can point you (indirectly) at some of the topics to consider. But any assertion that "X caused the problems" or "Y would have prevented the problems" must be considered highly suspect. There just hasn't been enough time for
anyone to do careful evaluation of what's happened... even if we assume that there's anyone with access to all the necessary data at this point.
Quote:
Originally Posted by zerospinboson
"Classic small-government" is a pipe dream (look at what "small-govt believer" Bush did, pushing spending through the roof in order to try to bankrupt the government, saddling the public with the costs, and making sure lots of the money went to Halliburton & Co., thus ensuring that his friends would gain from his being in power) that I hope has once and for all been proven to be at very, very, very bad idea. [SNIP Halliburton examples]
That's the kind of thing that would disturb me, but as you can see, they're all regulation-related, so I'm just being a european again.
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Firstly, you should remember that neither W nor his father
even remotely approach being "small-government" supporters. I rather doubt that the Republican party has supported anything I would consider small government since the days of Barry Goldwater -- if even then.
W presided over the largest increase in government regulation in US history. This doesn't prove that small government is a bad idea! Rather it proves that the Republicrats and the Demoblicans can't be trusted with the reins of government power. (Of course we already knew that...) One party can be counted on to increase the size and power of the federal government in the name of Labor, "taking care of the poor," and "think of the children." The other party can be counted on to increase the size and power of the federal government in the name of "morality," "family values," "getting back to business" and "think of the children." A plague on both their houses!
The view from over here where the small-l libertarians hang out is that the recent meltdown certainly cannot honestly be blamed on deregulation when the supposed deregulation never happened in the first place! Further, most small-l libertarians are generally in favor of regulation (perhaps better called commercial law and enforcement thereof) that address things like financial transparency in corporations, anti-fraud laws (which apparently should have been strongly applied to many mortgage brokers!), and other legal constructs that encourage honest and fair dealing. Likewise, the very large contributions of Fanny Mae and Freddie Mac appear to have been driven by the moral hazard created by their government backing. "We don't have to worry about the downside risk -- Uncle Sam backs our stock!"
That's a problem that has nothing to do with free markets or lack of regulation, and everything to do with government intervention.
Xenophon