In a post on “Economist’s View“, Mark Thoma wrote:
“Every market that was supposed to self-regulate failed?” … “So more and more I’m starting to think there may be a single explanation after all, that the regulators of these markets were captured by powerful forces that wanted the game to continue.”
Well, which is it? Did self-regulation fail or did government regulators fail to do their job? Which of the steps Mark has noted was wholly self-regulated? Mortgage brokers, realtors, appraisers, and rating agencies, are all licensed and regulated! Truly the only players not regulated by the government are homeowners and the government. Corporations being a mixed bag of limited regulatory oversight.
Everyone has some aspect of self-regulation. Don’t rob customers. Don’t cheat on taxes. And all of us have layers of regulations. If self-regulation failed then put the miscreants in jail. But if regulatory agencies failed what do we do then?
Mark and the commenter’s seem determined to paint the regulatory failure as a Republican failure – usually Reagan or Bush (43) or both. Granted this is a liberal blog with a liberal author and most commenter’s seem to also be liberals (judging from the comments). I assume therefore all are Democrat. You don’t like Republicans in general and Reagan and Bush (43) in particular. Peachy.
But for all your dislike (and I’m being kind) the regulatory failure that is at the heart of this morass has been and continues to be a massive bi-partisan affair. One clear example: the failure of Congress and regulators alike to label a Credit Default Swap (CDS) as an insurance policy. Doing so would have put every CDS under the insurance regulator. Not doing so let every bank, hedge fund, pension fund, et.al. go wild.
That simple act was/is a key factor in this economic maelstrom. That act was totally bi-partisan and totally intentional on the part of Congress and the various agencies. If it wasn’t for the CDS all the MBS and CMBS would not have had their AAA ratings and would not have been such “good” investments.
Get over your disklike of Reagan and Bush (43) if you really want to truly reform our economy. Shove your anti-Republican rants over to Wonkette. It’s a sport over there.
Tags: Democrat, homeowners, Republican
This entry was posted on April 22, 2009 at 8:01 pm and is filed under Economics, Markets. You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
[…] Regulatory Failure « RedSt8r […]
Fill in your details below or click an icon to log in:
You are commenting using your WordPress.com account. ( Log Out / Change )
You are commenting using your Twitter account. ( Log Out / Change )
You are commenting using your Facebook account. ( Log Out / Change )
You are commenting using your Google+ account. ( Log Out / Change )
Connecting to %s
Notify me of new comments via email.
Blog at WordPress.com.
Entries (RSS) and Comments (RSS).