The argument against self-regulation.

Discussion in 'Economy' started by Supposn, Feb 5, 2012.

  1. Supposn
    Offline

    Supposn Senior Member

    Joined:
    Jul 26, 2009
    Messages:
    863
    Thanks Received:
    27
    Trophy Points:
    51
    Ratings:
    +31
    The argument against self-regulation.

    Refer to
    Glass-Steagall Act: The Senators And Economists Who Got It Right

    The Glass-Steagall Act of 1933 defined the differences and prohibited the practice of commercial banks participating in enterprises that were the functions of investment banking, (not to be confused with their 1932 which had different purpose).

    I do not pretend to understand the conflicts of interests and opportunities of fraud that’s possible when single entities have their feet within the doors of less risky forms of banking and the more risky investment and brokerage houses.
    It is enough for me to appreciate that having just experience the 1929 Wall street crash and the significant deconstruction of much world’s economies, governments in 1933 were inclined to be more financially prudent and Wall Street “experts” were subject to diligent cross examination.

    Within this same 1933 act, the federal deposit insurance corporation, (FDIC) was created. Due to the FDIC, confidence in USA banks recovered (and the reputation of the banking industry began being restored). The 1933 act’s purpose of limiting the acceptable risks for non-investment banks also decreased the risks of the FDIC to a similar extent.

    Generally within any field, those regulated to some extent object to their regulators and the regulators’ mandates. The banking industry never ceased objecting to the intervention of “inexperienced” or “impractical” government bureaucrats. The regulated (in all fields) generally believe they can do it, (regardless of whatever “it” is), at lesser expense or time or in a superior manner.

    Prior to the 2007 ‘credit crunch” Alan Greenspan, ex-chairman of the U.S. Federal Reserve Board wrote of his confidence in self regulation because CEO’s know what’s to their enterprise’s best interests. Mr. Greenspan is obviously both honorable and intelligent because he has since modified his opinion and embraced my belief in this matter.

    CEO’s probably are to some degree more intelligent than most of us, but that’s only differences of degrees. We can all rationalize that what we believe is in our own best interests is also in our employer’s and our nation’s best interests. Having reached OUR rational conclusion, that’s what we advocate.

    I greatly appreciate the Ying and Yang relationship of separation of powers and cross examinations within any human endeavors where subjective determinations are of critical importance.

    Respectfully, Supposn
     
  2. Toronado3800
    Offline

    Toronado3800 VIP Member

    Joined:
    Nov 15, 2009
    Messages:
    3,572
    Thanks Received:
    274
    Trophy Points:
    85
    Ratings:
    +355
    We agree so much I consider this obvious.

    The same human failings that make socialism an unrealistic system make self regultion unrealistic.
     
  3. Supposn
    Offline

    Supposn Senior Member

    Joined:
    Jul 26, 2009
    Messages:
    863
    Thanks Received:
    27
    Trophy Points:
    51
    Ratings:
    +31
    Toronado3800, your response is more concise and thus more eloquent than my message.
    Respectfully, Supposn
     
  4. Toddsterpatriot
    Offline

    Toddsterpatriot Gold Member

    Joined:
    May 3, 2011
    Messages:
    26,107
    Thanks Received:
    3,648
    Trophy Points:
    280
    Location:
    Chicago
    Ratings:
    +10,056
    It's true that Glass-Steagall would have prevented banks from writing bad mortgages.....wait, what?

    It's also true that entities that were more regulated by government than banks (Fannie and Freddie) did better than banks during the crisis.....wait, what?

    It's true that posting from Huffpost about economics makes you an object of ridicule.
     
    • Thank You! Thank You! x 2
  5. Wiseacre
    Offline

    Wiseacre Retired USAF Chief Supporting Member

    Joined:
    Apr 8, 2011
    Messages:
    6,025
    Thanks Received:
    1,192
    Trophy Points:
    48
    Location:
    San Antonio, TX
    Ratings:
    +1,194
    Glass Steagall sounds like a good idea to me, I see no reason why investment banking should be combined with the rest of it. In fact, I think they should be separate businesses with separate rules.

    There's a difference between less regulation and no regulation. I suspect most on the right realize that no regulation is a bad thing, it comes down to the question of what is necessary and what isn't. And the degree of enforcement matters too, part of the problem with the housing bubble and credit crisis was that the regulators didn't do their jobs.
     
    • Thank You! Thank You! x 1
  6. DSGE
    Offline

    DSGE VIP Member

    Joined:
    Dec 24, 2011
    Messages:
    1,062
    Thanks Received:
    30
    Trophy Points:
    71
    Ratings:
    +30
    Like how? :eusa_eh:
     
  7. Oddball
    Offline

    Oddball BANNED Supporting Member

    Joined:
    Jan 3, 2009
    Messages:
    41,428
    Thanks Received:
    8,397
    Trophy Points:
    0
    Location:
    Drinking wine, eating cheese, catching rays
    Ratings:
    +8,409
    Problem being that the deregulation of Glass-Stegall didn't create the sub-prime no-qualifying mortgage, mortgage-backed securities, Fannie & Freddy, the CRA, artificially low interest rates, etcetera.

    But facing up to this fact blows a big fat hole in the leftist propaganda strawman that de-reg caused the economic meltdown.
     
    • Thank You! Thank You! x 1
  8. Wiseacre
    Offline

    Wiseacre Retired USAF Chief Supporting Member

    Joined:
    Apr 8, 2011
    Messages:
    6,025
    Thanks Received:
    1,192
    Trophy Points:
    48
    Location:
    San Antonio, TX
    Ratings:
    +1,194

    Agree with everything you said. But if we had the investment banking side separate and distinct, maybe the credit crisis would not have been so bad. And dereg may not have been the cause, but had we done a better job of oversight and loosening up the req'ts to buy a house, maybe we wouldn't have had as many foreclosures.
     
    • Thank You! Thank You! x 1
  9. California Girl
    Offline

    California Girl BANNED

    Joined:
    Oct 8, 2009
    Messages:
    50,337
    Thanks Received:
    8,960
    Trophy Points:
    0
    Ratings:
    +8,965
    Yep.
     
  10. EdwardBaiamonte
    Online

    EdwardBaiamonte Gold Member

    Joined:
    Nov 23, 2011
    Messages:
    27,553
    Thanks Received:
    1,130
    Trophy Points:
    205
    Ratings:
    +3,047
    that of course is idiotic since you have human regulation in both socialism and capitalist self-regulation.

    The huge huge difference is that you have a few regulators under Socialism and 300 million under capitalist regulation. Got it?

    Under socialism you can one housing crisis that sinks the entire nation. Under capitalism a problem is localized, others see it, and the disease does not spread!!
     

Share This Page

Search tags for this page

argument against self regulation

,
arguments against self regulation
,
arguments against self-regulation
,
edward baiamonte
,

self regulation bad arguments