Wow...a failed financial industry specifically protected from any regulation would not be protected by a regulatory system that failed to prevent the last failure? Hmmm..."Wow...a crashed commercial airplane specifically protected from any inspection would not be protected by an inspection system that failed to prevent the last crash?"
Humans are humans no matter where they work and what they do. Some will selfishly abuse the trust of others for profit alone. We have plenty of financial instruments that are regulated that remain safe and successful...thanks to their ongoing regulation that helps prevent abuse and makes abuse punishable.
It simply blows my mind that some in Congress argue against regulation like it was regulation that failed...when there was no regulation...thanks to Congress!
A freshly deregulated mortgage industry only set the stage for a downturn. The main act was the derivatives market that rode on the flood of poorly-written, dishonestly-sold mortgages, a significant portion of which were doomed to fail before they were signed!
We do not need draconian regulations...we just need reasonable oversight and transparency to ensure the instruments being written or sold meet reasonable standards for risk, that they are made in good faith, and that those who seek to defraud investors will be subject to appropriate civil and criminal punishment.
Even with the rotten mortgage industry that grew out of the deregulation introduced in 2000 our problems would have been a fraction of what we have experienced. The wholesale gambling and outright fraud that emerged in the mortgage derivatives industry multiplied the mortgage-based problems many times over.
We are a great country, with the competency to establish markets that balance freedom and regulation so as to pursue economic opportunities while punishing if not preventing abuse. It does not have to be perfect, but we have lived through the grand promise and catastrophic failure of the "wild west" markets. Now it's time to grow up and be responsible about profits, but not hungry with greed.
1 comment:
Damn Scot. Well said. I only wish I had known you were writing sooner.
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