Ron Paul: The Moral Hazard of Regulation

what is wrong with the information at this link?

What's wrong with the information at the Mises.com link you were given?

You called that biased, but your Bush deregulation link somehow ISN'T?

Mises is a well known and otherwise credible source INTERNATIONALLY when it comes to knowledge about economics, you provided a link to a place called fucking zibb.com, and it blames Bush for dereg that he didn't even rival CLINTON on. Yeah, that's not biased :rolleyes:

Can you make your OWN case for your opinion on deregulation, or can't you perform well without the safety blanket of a 'blame bush' link?
 
That's the magic of Capitalism in a country where the laws are observed. That's one reason why the United States is so wealthy. Of course, bigger government intrusions are killing America, so expect even the middle class to be destroyed. Pretty soon we'll all be sharing the misery.

There are reasons the US is so wealthy. Natural resources for one. You can't really do all that well without them and the US has them in abundance. Another reason is population. 300 m people are going to produce some really whiz-bang individuals and so there have been.

The reason for the economic crisis and the recession is that capitalism was allowed to run completely unchecked. Bad idea.
 
Why? It's a totally discredited philosophy. It failed.

How does something that never existed in the first place, fail?

Most of the liberals around here even admit there isn't a true free market. You wouldn't have one until you had currency freedom. You can't have a free market, where a monopoly on one currency exists, and a central bank controls money and credit through interest rate manipulation. It's impossible. The market moves based on the Fed's actions. That isn't a free market. There are ELEMENTS within the market that have an overall sense of freedom within them, but ultimately the market as a whole is nothing close to "free".
 
When Alan Greenspan, the former Federal Reserve chairman, appeared before a congressional committee last week, he admitted that during his two decades of Fed stewardship he was an ideologue with, in retrospect, a misplaced faith in the ability of financial markets to self-regulate.

During both Bush administrations, and Bill Clinton's presidency as well, Greenspan was considered an economic oracle, a man who could foresee crises and take steps to avoid them, so this was some admission.

The Greenspan mea culpa confirmed the dominance of neo-liberalism - embraced by conservatives, centrist US Democrats and by social democrats in Europe and in Australia - was over. The god of small government and unregulated markets is dead.

Greenspan's mea culpa a notable sign small government is over - Opinion
 
How does something that never existed in the first place, fail?

Most of the liberals around here even admit there isn't a true free market. You wouldn't have one until you had currency freedom. You can't have a free market, where a monopoly on one currency exists, and a central bank controls money and credit through interest rate manipulation. It's impossible. The market moves based on the Fed's actions. That isn't a free market. There are ELEMENTS within the market that have an overall sense of freedom within them, but ultimately the market as a whole is nothing close to "free".

The free market failed. It went haywire. It killed itself through greed. Once the theory became practice its flaws were apparent.
 
The free market failed. It went haywire. It killed itself through greed. Once the theory became practice its flaws were apparent.

Well, I argue that greed doesn't need to be regulated. I argue that consumers should be educated enough about money, that they shouldn't need the government to make their decisions for them.

You don't, and that's where we differ. Smarter consumerism could have avoided the US housing crisis.

Let me ask you something, would you have been stupid enough to sign an adjustable rate mortgage?
 
BTW all the citations on that site were sourced.

The site I was given is a site which labels itself as from a certain perspective.

History has never shown that an unfettered market is good for democracy.

That is the facts.

You guys have a fanatsy about an unfettered market and it has never been proven,.

Why do expect anyone to follow an unproven philosophy?
 
Well, I argue that greed doesn't need to be regulated. I argue that consumers should be educated enough about money, that they shouldn't need the government to make their decisions for them.

You don't, and that's where we differ. Smarter consumerism could have avoided the US housing crisis.

Let me ask you something, would you have been stupid enough to sign an adjustable rate mortgage?

What would have really avoided the crisis would have been regulation plus smart consumers. Now, what happened was that nil or insufficient regulation meant that gullible people were exploited. There's blame all round. But a gullible person can't be exploited unless there's someone willing to do the exploiting.

No I wouldn't have signed up for an adjustable rate mortgage. The reason is because I've owned houses and I've had to negotiate mortgages in various economic conditions. I was able to get information about what I should do. I'm not smart when it comes to economics, but I'm cautious and wary and not all that gullible. But I also negotiated my mortgages in a properly regulated financial system and any chance of exploitation of me were I uneducated or gullible was nil.
 
There are reasons the US is so wealthy. Natural resources for one. You can't really do all that well without them and the US has them in abundance. Another reason is population. 300 m people are going to produce some really whiz-bang individuals and so there have been.

Then Russia and the former Soviet Union would also be extremely wealthy. That didn't happen because they rejected capitalism.

The reason for the economic crisis and the recession is that capitalism was allowed to run completely unchecked. Bad idea.

Uh, no. Capitalism was curtailed by government intervention. This is a common misconception. You should look up Crony Capitalism. Yet another reason to get government out of business except for matters of law.
 
Greenspan only ever payed lip service to free markets, he never attempted to put them in practice as chairman of the Fed. The fact that there's a Federal Reserve at all means there is no free market. So you can bring up Greenspan being shocked that the free market failed all you want, but he was never a true advocate of laissez-faire economics.

The problem I have with Truthmatters and Diuretic is that neither of you are giving reasons why a free market society would fail, just that it's not viable and that "good regulation" would be a solution to all our woes. If you're not able to defend your position then why are you arguing?
 
They would have been fine if they hadn't lent the money to people who couldn't afford it, and who SHOULD HAVE KNOWN BETTER.

Both are to blame. But You don't get to blame deregulation while completely avoiding the manipulation of credit by the Fed.

There's no reason a bank should be setting our rates as they see fit, and offering virtually-free overnight credit to supposedly "jumpstart an economy". All they do is jumpstart another bubble with their newly created liquidity that ultimately looks for a home somewhere in the market. It's too much money to be putting into the system, and it causes asset bubbles. It's a damn endless cycle, we watch it happen every 5 or so years now. But somehow, like idiots, we continue to let them do it because you know why? We're too fucking lazy and stupid to care enough to research it for ourselves. We care only enough to allow them to do what they tell us is best for us, because then we can go on living our lives without the headache.

It's much more fun to make it partisan, and blame it on a wedge issue that we can fight about every election, or every catastrophe for that matter.

Have you taken the time to research Austrian economics, Rav?
Sure, people that can't afford loans shouldn't apply for them. But I'm not sure what you're advocating here, making laws against stupid people? Seems to me it would be more fair, and more constitutionally sound, to make laws against selling loans the same day you made them.
 
The Moral Hazard of Regulation

Since the bailout bill passed, I have been frequently disturbed to hear “experts” wrongly blaming the free market for our recent economic problems and calling for more regulation. In fact, further regulation can only make things worse.



It is important to understand that regulators are not omniscient. It is not feasible for them to anticipate every possible thing that could go wrong with whatever industry or activity they are regulating. They are making their best guesses when formulating rules. It is often difficult for those being regulated to understand the many complex rules they are expected to follow. Very wealthy corporations hire attorneys who may discover a myriad of loopholes to exploit and render the spirit of the regulations null and void. For this reason, heavy regulation favors big business against those small businesses who cannot afford high-priced attorneys.



The other problem is the trust that people blindly put in regulations, and the moral hazard this creates. Too many people trust government regulators so completely that they abdicate their own common sense to these government bureaucrats. They trust that if something violates no law, it must be safe. How many scams have “It’s perfectly legal” as a hypnotic selling point, luring in the gullible? Many people did not understand the financial house of cards that are derivatives, but since they were legal and promised a great return, people invested. It is much the same in any area rife with government involvement. Many feel that just because their children are getting good grades at a government school, they are getting a good education. After all, they are passing the government-mandated litmus test. But, this does not guarantee educational excellence. Neither is it always the case that a child who does NOT achieve good marks in school is going to be unsuccessful in life. Is your drinking water safe, just because the government says it is? Is the internet going to magically become safer for your children if the government approves regulations on it? I would caution any parent against believing this would be the case. Nothing should take the place of your own common sense and due diligence.

continued: Congressman Ron Paul - The Moral Hazard of Regulation - Texas Straight Talk

Markets work best when prices are derived at via market fundamentals of supply, demand, earnings, evaluation of management, product value, etc, and cease to function well when rampant speculation, usually driven by either abject fear or runaway greed, rules the market. Any regulations applied to markets should be to prevent rampant, pure speculation and the instruments that play solely to enhance purely speculative activity. Strick daily limits up or down, limits on volume, etc, and limits on creation of instruments to increase, exponentially, leverage, basically eliminate secondary paper on primary instruments of a market.
 
Then Russia and the former Soviet Union would also be extremely wealthy. That didn't happen because they rejected capitalism.



Uh, no. Capitalism was curtailed by government intervention. This is a common misconception. You should look up Crony Capitalism. Yet another reason to get government out of business except for matters of law.

Soviet Union. Different from the US in so many ways. Firstly, it has never known the notion of liberal democracy. It transformed itself from absolute monarchy to party dictatorship. As a party dictatorship it used its natural resources for the benefit of the party state. It achieved much but also causd much suffering for its own people. Now it has much wealth - well it did, the economic crisis has pretty much stuffed it up - but the wealth is/was contained in few hands. Unlike the US Russia/Soviet Union/Russia has been very badly led and very badly managed.

Capitalism - unrestrained and dangerous. Capitalism - restrained and useful.
 
The government's role in the market is to enforce contracts and prosecute fraud, nothing more. Funny how in this recent crisis the government has done everything except what it should be doing.
 
Bush did a shit load of deregulation.

what is with your brain?

actually he didn't

Meltdowns and Myths: Did Deregulation Cause the Financial Crisis?

read and learn

you might like this line referring to Gramm-Leach-Bliley

In the nine years since that legislation--including the eight years of the Bush presidency--Congress has enacted no further legislation easing burdens financial services industry.


Perhaps surprisingly, the Bush record in this regard is actually less deregulatory than that of the Clinton Administration,

so if congress has not enacted any legislation easing burden of financial services (That's deregulation to you) since 2000, then tell me what exactly what deregulatory legislation has been enacted under GW?
 

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