17 thoughts on “Regulatory Rhetoric 101

  1. Kathleen Janasz says:

    If this isn’t an argument in support of a hearty public education system, I don’t know what is! Only sufficiently educated citizens – people with critical thinking skills – will move beyond “outrage,” recognize the cycle and bust it up. Lemmings are capable of outrage – whether inspired by Palin or Carville – but not much else.

    1. Joe Loveland says:

      Agree, Kathleen. We just continually react instinctively to the daily punch and counter-punch — “today I’m mad at X”…”now I’m outraged at Y” — without applying enough critical thinking about long-term trends and implicaitons. It leaves us vulnerable to manipulation.

  2. Mike Kennedy says:

    Oh, for Pete’s sake.

    The oil and banking industry are two of the most regulated industries in the history of America.

    Yet more regulation would prevent blowups? Has anyone worked in a bank? My office was in one for eight years. If you think they are deregulated, you need to visit with your local banker about their audits, examiners, compliance regulations and paperwork requirements.

    I’m not saying we need less regulation. But we hardly need more. This oil spill was created by our desire for cheap oil but our mistaken notion that slightly disturbing a few migratory patterns would be more environmentally damaging than a massive blow out of a deep water oil rig. What the hell were we expecting?

    I know for liberals that corporations wear the black hats and government wears the white ones and for libertarians it’s the other way around. If only life were so………….black and white.

    1. Try reading Thomas Frank’s The Wrecking Crew. SEC enforcement actions fell 90% during the Bush years. When an SEC investigator merely asked to interview a hedge fund manager he was fired. With the abolition of Glass-Steagall there essentially was no difference between investment banks and regular banks. The notion that they were adequately regulated is farcical.

      1. Mike Kennedy says:

        I’ve read plenty of Thomas Frank, including his column every Friday in the WSJ as the token leftie.

        Enforcement actions fell? Well, hold the phones. Could it be that the subprime stuff that was being created and sold was legal? Yep. In fact, it was. Please explain exactly what was illegal that wasn’t being enforced. I’ve asked that of PM.

        Second point, the SEC had nothing to do with the Fed giving money away by flooding the economy with liquidity, nor did it have anything to do with mortgage brokers falsifying information on applications, or applicants lying about their financial status or Fannie and Freddie buying the aforementioned toxic junk or of regular bankers selling off subprime mortgages to Wall Street, which in turn sold massive amounts to Fannie and Freddie.

        The fact is, the SEC oversees some parts of investment banks and Wall Street securities firms, which played a part in the blowup, but was one actor among many.

        To the extent this was a regulatory problem (which I’m not convinced), you would be advised to direct your anger toward former President Clinton, who signed the banking deregulation laws.

  3. Ellen Mrja says:

    NOTE: This was not an oil spill. A spill is “contained” amount – i.e., to the volume of the tanker in which it was loaded.

    This is an oil leak (at its most kind description). Its containment is not certain. No one knows how much oil is flowing out of the BP pipes. No one knows when it will stop nor what its long-term damage will be.

    Joe: Beautiful model with one critical error. Government is not too inept to stop abuses; most times government officials have allowed themselves to be compromised by cash, lobbying and votes. Government sells the people down the river. It’s not too inept. It’s more like corrupt.

    1. Joe Loveland says:

      “Government was too inept…” was intended to reflect the accusation that some make, not a factual description of reality. “Government was too inept” is what Talkers say at that stage of the Circle of Life.

  4. Newt says:

    This chart is largely accurate, but it omits a couple of other stages or drivers — regulatory adventurism by lawmakers (the exercise of political power because they can); influence by non-industry special interests, etc.

  5. john sherman says:

    I don’t understand conservatives: They complain that “government can’t do anything right”; “government is the problem, not the solution,” and then run like rats in heat to become the government. It’s like imagining vegetarians pushing and shoving to get jobs in butcher shops.

    The fact of the matter is that people who believe that government exists to be a job shop for cronies and otherwise unemployable relatives and that it is a great till to be looted end up producing a government that in fact can’t do very much right as the Bush administration proved. Still, everyday we all deal with government employees and agencies routinely doing things right and being part of the solution.

    1. If a person believes “more government” — whatever that might mean in particular context — is a bad thing, it’s likely she’ll be more effective in affecting the government’s course of action as part of that government than from the outside. Or more directly, imagine the horror she’d face if “the government” was composed entirely of “the other guys”!

      It’s not ridiculous to believe that government is flawed while being (or seeking to become) part of that government.

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