Was 'no need' to regulate these private market Credit Default Swaps at ALL!
After all... the 'free market always knows best', 'red tape' is 'always bad', and what could possibly ever go WRONG anyway?
(I mean... letting a totally non-regulated, non-exchange traded, private-party market in 'insurance contracts' with ZERO COLLATERAL in backing grow to be 50, 60, 70 TRILLION in size couldn't ever create any problems for Joe Six Pack, now could it?)
Thanks to the hard work of brainiacs like Rep. Thomas W. Ewing (R-IL), Rep. Thomas J. Bliley, Jr. (R-VA), Rep. Larry Combest (R-TX), Rep. John J. LaFalce (D-NY, and Rep. Jim Leach (R-IA) regulating CDS's were never discussed on the floor of the US House.
And thanks to the hard work of Sen. Richard Lugar (R-IN), Sen. Peter Fitzgerald (R-IL), Sen. Phil Gramm (R-TX), Sen. Chuck Hagel (R-NE), Sen. Thomas Harkin (D-IA), Sen. Tim Johnson (D-SD) it was never debated in the Senate.
Because these foresighted politicians (and many, many others!) saw no need AT ALL for the "red tape" of Big Gum'mint regulators getting in the way of all the fun... and they specifically carved-out a legal loophole enabling the buying and selling of CDSs with absolutely no regulation whatsoever!
Then placed the loophole into the omnibus spending bill:
en.wikipedia.org |
