4 ms·

An important counterexample that comes to mind is the Glass-Steagall banking act, the repeal of which arguably led to the greatest financial crisis in a century

by t_mann 4y ago

An important counterexample that comes to mind is the Glass-Steagall banking act, the repeal of which arguably led to the greatest financial crisis in a century https://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_legislation#Aftermath_of_repeal https://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_legisla... shows that a) laws do indeed get repealed in the US and b) reducing regulation may even increase the risk of chaos, not reduce it

yyyk 4y ago
> arguably led to the greatest financial crisis in a century The act did not ban securitization or buying derivatives. Even wiki can't find any justification for this argument beyond an unsourced 'cultural shift'.
- andrewprock 4y ago
  The repeal allowed banks and investment houses to be run under the same roof, changing the aggregate risk profile of financial institutions greatly, in the direction of significantly higher, and now correlated risk.
  - yyyk 4y ago
    Ordinary 'investment banks' were perfectly capable and allowed to hold securities under G&S, in fact they issued more than any 'same roof' banks had (and as the wiki cite in the other thread shows, there was little structural change following repeal).
- t_mann 4y ago
  The argument has its own wikipedia article with numerous citations, including from Economics Nobel (Memorial) Prize winners https://en.wikipedia.org/wiki/Aftermath_of_the_repeal_of_the_Glass%E2%80%93Steagall_Act#Notes https://en.wikipedia.org/wiki/Aftermath_of_the_repeal_of_the... saying that wikipedia makes 'unsourced' claims there is acting in extremely bad faith And even if you read all those citations and didn't find them convincing (or found the cited counterarguments more convincing), then point a) above would still stand - claiming that regulations are never revised or repealed is an uninformed stance
  - yyyk 4y ago
    I referred to a particular point in the original cite[0], which is unsourced. Taking that to refer to my entire argument is, well, bad faith. As for your new cite, I'd say it's the arguments in favour that are most damning. They tend to eventually concede the point that G&S did not and would not ban the behaviour leading to the crisis; They just lament that their policy choices weren't implemented at the time or lament some 'cultural shift' with no evidence to substantiate it (IMHO, everyone looking could have seen the culture shifting at least a decade earlier). Aside, the argument was never that regulations are never repealed - but that the natural overall direction is ever expanding regulation. This thread is arguably somewhat of a confirmation, since people are arguing for a regulation which had little to do with the crisis... [0] "The perception is that the Glass-Steagall Act created a sense of accountability among investors within the financial management industry... Thus a cultural shift was certainly in order after its repeal regardless of the loopholes that existed prior." This has no source, and violates wiki's ban on original research.

by t_mann 4y ago

yyyk 4y ago

> arguably led to the greatest financial crisis in a century The act did not ban securitization or buying derivatives. Even wiki can't find any justification for this argument beyond an unsourced 'cultural shift'.

andrewprock 4y ago
The repeal allowed banks and investment houses to be run under the same roof, changing the aggregate risk profile of financial institutions greatly, in the direction of significantly higher, and now correlated risk.
- yyyk 4y ago
  Ordinary 'investment banks' were perfectly capable and allowed to hold securities under G&S, in fact they issued more than any 'same roof' banks had (and as the wiki cite in the other thread shows, there was little structural change following repeal).
t_mann 4y ago
The argument has its own wikipedia article with numerous citations, including from Economics Nobel (Memorial) Prize winners https://en.wikipedia.org/wiki/Aftermath_of_the_repeal_of_the_Glass%E2%80%93Steagall_Act#Notes https://en.wikipedia.org/wiki/Aftermath_of_the_repeal_of_the... saying that wikipedia makes 'unsourced' claims there is acting in extremely bad faith And even if you read all those citations and didn't find them convincing (or found the cited counterarguments more convincing), then point a) above would still stand - claiming that regulations are never revised or repealed is an uninformed stance
- yyyk 4y ago
  I referred to a particular point in the original cite[0], which is unsourced. Taking that to refer to my entire argument is, well, bad faith. As for your new cite, I'd say it's the arguments in favour that are most damning. They tend to eventually concede the point that G&S did not and would not ban the behaviour leading to the crisis; They just lament that their policy choices weren't implemented at the time or lament some 'cultural shift' with no evidence to substantiate it (IMHO, everyone looking could have seen the culture shifting at least a decade earlier). Aside, the argument was never that regulations are never repealed - but that the natural overall direction is ever expanding regulation. This thread is arguably somewhat of a confirmation, since people are arguing for a regulation which had little to do with the crisis... [0] "The perception is that the Glass-Steagall Act created a sense of accountability among investors within the financial management industry... Thus a cultural shift was certainly in order after its repeal regardless of the loopholes that existed prior." This has no source, and violates wiki's ban on original research.