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Politics : Don't Blame Me, I Voted For Kerry
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To: American Spirit who wrote (78795)8/2/2006 4:43:50 PM
From: TimFRead Replies (1) of 81568
 
Deregulation helps more than it hurts but it can be harmful if done wrong. You can get rid of important regulations in the process, or partial deregulation can distort the market when parts of it are deregulated and other parts are heavily regulated.

The S+L situation may have been either or both depending on how you look at it. It certainly caused a "moral hazard" when the S+L's were allowed to make riskier investment but still have their depositors fully protected. Without the insurance S+Ls that acted in risky ways would lose depositors. With it depositors get to pass the risk to the government. The depositors get extra interest, and if the S+Ls schemes to generate a profit don't pan out and the S+L goes under the depositors get their money back from the government. Private profit but at least partially socialized risk. That causes problems. I don't think there was anything sinister about the way the S+Ls or the CA electricity market where deregulated, but it doesn't have to be sinister. Stupid is bad enough...

The energy gouging is even worse because it all takes place behind their fortress doors.

You haven't even established that any such price-fixing exists, or why if it does the average profit margin and return on equity in the energy, or oil industry is unexceptional.
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