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Private organizations could do the same safety checks Someone didn't learn anything from the 2008 crash and the issue of private ratings agencies... Privatize

by zzalpha 11y ago

Private organizations could do the same safety checks Someone didn't learn anything from the 2008 crash and the issue of private ratings agencies... Privatize safety checks and businesses will shop around to get a certification. Believe it or not, capitalism doesn't solve every problem.

skylan_q 11y ago
So what you're saying is: It doesn't solve the problem of the combination of gov't corruption and private sector corruption, so private safety regulators/inspectors would never be able to keep anything safe.
nsxwolf 11y ago
And some ratings agencies would compete to be the one with the best reputation, which would lower the value of shopping around for substandard ones.
- Spooky23 11y ago
  Why? The customer isn't the consumer of bonds, it's the underwriters and borrowers. By stamping shit debt as AAA, they were providing a wonderful level of service for their customers -- the bankers.
- pessimizer 11y ago
  Only in the fantasy world where people have the time and expertise to evaluate the relative merits of hairdresser ratings agencies.
ad_hominem 11y ago
Someone didn't learn about the de facto monopoly the SEC (federal gov't) gave the Big Three (Moody's, S&P, Fitch) at the time of the meltdown through its NRSRO status: https://en.wikipedia.org/wiki/Nationally_recognized_statistical_rating_organization#Subprime_mortgages.2C_CDOs.2C_and_the_financial_crisis https://en.wikipedia.org/wiki/Nationally_recognized_statisti... The whole banking and financial system at that level has its tendrils wrapped so firmly around the gov't (and vice versa) that a failure there is hardly an indictment of free market principles.
- AjithAntony 11y ago
  > monopoly the SEC (federal gov't) gave the Big Three (Moody's, S&P, Fitch) But wasn't part of the problem that there was competition among them? They were handing out favorable(fraudulent) ratings becuase they were trying to poach customers from the others?
- lmm 11y ago
  We're not going to remove all government in one fell swoop. So cases where deregulation causes problems are a strong argument against blindly supporting any and all deregulation. "Deregulation works, you're just not using enough of it" is fallacious IMO, but even if it were correct it would still be irrelevant.

by zzalpha 11y ago

skylan_q 11y ago

So what you're saying is: It doesn't solve the problem of the combination of gov't corruption and private sector corruption, so private safety regulators/inspectors would never be able to keep anything safe.

nsxwolf 11y ago

And some ratings agencies would compete to be the one with the best reputation, which would lower the value of shopping around for substandard ones.

Spooky23 11y ago
Why? The customer isn't the consumer of bonds, it's the underwriters and borrowers. By stamping shit debt as AAA, they were providing a wonderful level of service for their customers -- the bankers.
pessimizer 11y ago
Only in the fantasy world where people have the time and expertise to evaluate the relative merits of hairdresser ratings agencies.

ad_hominem 11y ago

Someone didn't learn about the de facto monopoly the SEC (federal gov't) gave the Big Three (Moody's, S&P, Fitch) at the time of the meltdown through its NRSRO status: https://en.wikipedia.org/wiki/Nationally_recognized_statistical_rating_organization#Subprime_mortgages.2C_CDOs.2C_and_the_financial_crisis https://en.wikipedia.org/wiki/Nationally_recognized_statisti... The whole banking and financial system at that level has its tendrils wrapped so firmly around the gov't (and vice versa) that a failure there is hardly an indictment of free market principles.

AjithAntony 11y ago
> monopoly the SEC (federal gov't) gave the Big Three (Moody's, S&P, Fitch) But wasn't part of the problem that there was competition among them? They were handing out favorable(fraudulent) ratings becuase they were trying to poach customers from the others?
lmm 11y ago
We're not going to remove all government in one fell swoop. So cases where deregulation causes problems are a strong argument against blindly supporting any and all deregulation. "Deregulation works, you're just not using enough of it" is fallacious IMO, but even if it were correct it would still be irrelevant.