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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (29735)	10/3/2008 5:16:21 PM
From: TimF	Read Replies (1) \| Respond to of 71588

“The problem with such voluntary programs is that, as we’ve seen throughout history, they often don’t work.” That is exactly true. But is misses the point that more traditional regulation also often doesn't work, esp. with "new and complex" finacial instruments that where not a serious issue during any previous downturn. Your always going to rely to a very great deal on risk management by investment concerns and market discipline on those concerns, because even with old and fairly well understood securities regulators can't think of everything, or head off every severe risk (and the mere attempt at doing so would be likely to do more harm than good). Your going to have booms and busts, and failures of types of investment schemes and strategies. Trying to stop them will fail, and will cause its own damage. Relying on market discipline is much less likely to work in the context of a belief (justified or not) that losses can be at least partially socialized or otherwise dumped on others. Which is one of the biggest reasons to oppose bailouts. To be fair to the proposals that I oppose, they are not 100% bailouts. Many of the equity holders will have their holdings wiped out or at least greatly reduced, at least at the firms that actually go under, or have to accept specific massive bailouts like AIG. But in the healthier portion of the group of companies that still took a lot of risks, you do get a bailout, and creditors, even for the totally failed companies, get bailed out.