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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Katelew who wrote (102056)	1/26/2009 8:03:31 PM
From: Sam	Respond to of 543006

I see the 40X leverage and foolish derivatives that brought down the financial services industry as economic laissez-faire. The result is not fantasy. It's all because of bad regulations and the moral hazard resulting from the belief that Uncle Sam will bail out the sector whatever happens. Didn't you know that?

To: Katelew who wrote (102056)	1/26/2009 8:05:49 PM
From: TimF	Read Replies (1) \| Respond to of 543006

I see the 40X leverage and foolish derivatives that brought down the financial services industry as economic laissez-faire. If there is a billion things that could be regulated, and one of them isn't, that's hardly laissez-faire, unless any economy freer than North Korea's is laissez-faire. The derivatives where not regulated all that much before Bush, does that mean that Clinton, oversaw a laissez-faire system? With many billions spent on regulatory enforcement, and hundreds of billions or even very low trillions spent on compliance, you hardly have a laissez faire system. Also the 40X (I believe 30X but its a quibble not worth arguing about so I'll go with 40) was itself a regulation, not laissez-faire. It may have been a bad way to regulate things, as was the strong benefit given in terms of capital requirements to securitized loan products over actually holding a loan, but "foolish regulation" doesn't equal "no regulation".