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Finance is one of the most heavily regulated industries in existence. To hold it up as an example of the pitfalls of unregulated free-markets goes way beyond di

• yummyfajitas 16y ago
  Where did the article do this?
  • axiom 16y ago
    Are you being facetious? The whole point of the article is that Visa and MasterCard are "manipulating" the market so the government has to step in to regulate it some more because clearly the free-market isn't working. The evasion is that the only way to actually manipulate the market is through government policy.
    • kgrin 16y ago
      "Finance" is a pretty broad word; the payment card market (at least until recently) has been pretty free of regulation, certainly of regulation that would prevent the sort of abuses highlighted in the article. One interesting point is that the form of regulation that currently exists - the various laws and rules that led to the billion-dollar settlements - still don't have enough teeth (sort of like the "cost-of-doing-business" fines that gross polluters pay that are barely a day's worth of profits).
      • dantheman 16y ago
        The trick to getting people to stop polluting is to remove limited liability and enforce property rights. If you have to ensure your business, your insurer will make sure that you follow their regulations and if you don't they won't pay and you'll go bankrupt. The property owner gets to sue the polluter, and thus they get compensated instead of the fine going to the government it goes to those who are hurt.
        • notauser 16y ago
          The reason we have limited liability is because we wished to promote company ownership to more people. Personally I'm right behind the idea of telling people that if they, or their pension fund, owns one share in BP they are jointly and severally liable for the entire corporate obligation of the company. It's certainly make more people take exercising their oversight duties more seriously. Attendance at shareholder meetings to elect boards would be much higher. But I think it might have a few unexpected impacts on the availability of capital that you should think about. There aren't many people who would be willing to take that risk.
          • dantheman 16y ago
            I think things would change, but I don't know how much. Through insurance and bonding the risk can be mitigated, but the cost of owning the stock (the rates you need to pay) are now determined by the companies behavior so it becomes in their best interest to not cut corners. By aligning interests the problem goes away.
      • axiom 16y ago
        Honestly you would call it free of regulation? take a look at others who have tried to start payment service companies - even in the relatively free internet space it's an absolute nightmare. If you actually tried to start a new credit card company your number one barrier is not providing a better service than VISA but somehow managing to deal with the absurd amounts of red tape and regulations that go along with that. e-Gold is a nice shining example of the kind of insanity that's involved. Finance, healthcare and education are the top 3 most heavily regulated industries in the world. Now purely as an intellectual exercise, what are the most backwards, broken, evil industries that everyone always complains about?
    • loewenskind 16y ago
      >The evasion is that the only way to actually manipulate the market is through government policy. I don't agree with this. If you do really well in the market you can get big enough that no one can compete anymore and you no longer even need to try. Look at Microsoft for an example. Do you think they were manipulating government policies in the rest of the world?
    • maxharris 16y ago
      I think I agree with you, as long as what you mean is: "they are evading the fact that the only way to actually manipulate the market is through government policy."
• bhiggins 16y ago
  Tell me about it! All those regulations over credit default swaps and... oh wait, there are none.
  • anamax 16y ago
    > All those regulations over credit default swaps AIG was heavily regulated. In fact the insurance was a creation of regulators so they could justify forcing regulated banks to hold MBOs as assets. And then there's Fannie and Freddie - both creatures of regulation. And the bond rating monopoly granted by the SEC.... Regulation is systemic risk.