The "Regulation" Argument

Discussion in 'Economy' started by rdean, Mar 6, 2010.

  1. rdean
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    rdean rddean

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    I was watching TV last night and someone made a great argument for regulation.

    In Chile, less than 1,000 people died from the recent earthquake.

    In Haiti, more than 220,000 people died from their recent earthquake.

    The quake in Chile was 500 TIMES MORE POWERFUL – the fifth most powerful ever recorded. In fact, people there said they couldn't stay standing because of the shaking.

    It seems that in the 1970’s, after an earthquake that killed many people, regulations for buildings were written and building codes strictly enforced.

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    Now the US just had a financial meltdown brought on by years of removing regulations and no oversight (Republicans insist that's good for business, Democrats not so much).

    Since that “financial earthquake”, not a single new regulation has been put in place to ensure that it won’t happen again.

    So the question becomes, in the next recession, will we be Chile or will we be Haiti?
     
  2. Paulie
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    Paulie Platinum Member

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    Chile has a MUCH better off economy than Haiti, dummy. It's a developed nation, whereas Haiti is third world. You're literally comparing apples to oranges.

    It's much more affordable to conform to those regulations in Chile.

    Of course, that's what regulation really ends up coming down to. Whether or not one can afford to conform to it.
     
  3. rdean
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    rdean rddean

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    So you're saying we can't afford regulations? Some would say we can't afford NOT to have regulations.
     
  4. California Girl
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    California Girl BANNED

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    I am particularly entertained by rdean's comment about the democrats preferring regulation. If that is the case, why did they work so hard to stop any regulation of Fanny and Freddie?
     
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  5. Paulie
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    Paulie Platinum Member

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    How am I saying that? I'm not even touching on the U.S. part of your post. Just that you think comparing Haiti to Chile is a good argument for regulation.

    Regulation requires extra expenditure to achieve conformity. In Haiti, almost everyone is poor. Most people there are even lucky to have some type of roof over their heads at ALL. If regulation was imposed for stronger building, how many of those people do you think would end up homeless because they simply can't afford to conform?

    That you're trying to parlay that comparison into why the US should impose more financial regulation is ridiculous. It's not even REMOTELY an adequate analogy.
     
  6. Paulie
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    Paulie Platinum Member

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    Probably because it's not really about what's best for the people, but what's best for those that political favors are owed to.

    But I understand your point in asking the question anyway.
     
  7. California Girl
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    California Girl BANNED

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    My point is only to highlight rdean's inability to see beyond his partisan view and see reality.
     
  8. rdean
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    rdean rddean

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    Nice deflection. So, do you think that the financial meltdown was caused by Freddie/Fannie?

    Let's take a look at that. The problem was building for years, but the "trigger" was the fact that cheap "mortgages" were bundled together and sold overseas as "false" securities. Unsuspecting buyers were buying these "bundled securities" and that led directly to the "crash".

    So, did Freddie/Fannie sell these bundled mortgages overseas? Or did Wall Street?

    If it was Wall Street, then where did they get the mortgages? Not from Freddie/Fannie. No, because of deregulation, they were able to pretty much take over that market. Wall Street handed out mortgages like candy corn, bundled the mortgages together and sold them overseas as "securities". Did the Democrats deregulate Wall Street? Does it sound like something Democrats would do.

    I think that if you check it out, you will find that Freddie/Fannie required you to not only have a job, but you had to prove you could afford to pay a mortgage. Wall Street had no such provisions. The market moved from more than 70% Freddie/Fannie to more than 70% Wall Street.
     
  9. rdean
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    rdean rddean

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    My analogy is bad? Let me point out, "those people are homeless now", not just the poor, but everyone. Oops.
     
  10. Paulie
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    Paulie Platinum Member

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    Ok, so what would the government have done with all those people when they were made homeless YEARS ago because of unaffordable building codes?
     

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