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They are regulated. The regulators are complicit. Regulation is not a magic bullet. Moreover, regulation is not homogenous. More regulation is not always better

They are regulated. The regulators are complicit. Regulation is not a magic bullet. Moreover, regulation is not homogenous. More regulation is not always better/worse, and less isn't always better/worse. Leave the talking points at home.

hnhg 14y ago
Read parent again. He didn't say they any of the things you're trying to refute.
marekmroz 14y ago
Poor and complicit regulation is not much better than no regulation at all. Deregulation does not necessarily mean that suddenly all rules and regulations are removed. It may also mean making the rules more and more lax, to the point that breaking the rule is no longer needed. On the other hand limiting resources of the regulator can also be very effective as a mean of deregulation. The fact that there are some poor and rarely enforced rules does not constitute regulation. On paper things may look as they are regulated, but in practice it may be a whole different story.
antidaily 14y ago
The FCIC pretty much concluded that deregulation an self-regulation is what caused the financial crisis. So while it may not be a magic bullet, it's better than what we have.
forensic 14y ago
It's better to describe regulators as captured rather than complicit. Regulators have no chance when the people they are supposed to regulate have hundreds of times more power than the regulators. Allowing unlimited wealth concentration guarantees that the most powerful private interests are always more powerful than government regulators.
- smsm42 14y ago
  Power would matter a lot if regulators knew exactly what to do, but lacked power to enforce it. Unfortunately, most frequently regulators have very little idea about where the next crisis would come from (count how many times "unexpectedly" is featured in economical reporting) and what to do to prevent it, and there are many contradictory opinions on these subjects. Often they even have very little idea about what exactly major players are doing and why, and lack the ability to foresee all the risks. Moreover, since regulators are appointed by politicians (there's no other way to do it in democratic society) they of course would be heavily influenced by political considerations, which may be not to the best of the regulated industry - e.g., if politicians want more people have access to certain loans, regulators would force banks to accept more risk on such loans, even if it doesn't make financial sense to them. And then if such loans blow up, the bankers would have a valid claim to be bailed out - after all, didn't regulators ask them to accept such risks?
  - forensic 14y ago
    All of these are solvable problems. 1. Regulators lack visibility? Give them investigatory powers. 2. Regulators can't predict the next crisis? Maybe with bigger budgets they would have higher quality employees. All the talent works for the hedge funds who pay them literally hundreds of times more. If the person being regulated makes $1M/year the regulator needs more pay than that or there will be talent asymmetry. Obviously, the key issue here is that the financial sector gets paid way too much, way more than the value it produces. The profits are based on a rigged financial system. 3. Regulators appointed by politicians due to democracy? Cancel democracy and implement meritocracy. Require positions of power to be filled by civil servants with proven skill who have to pass tests, rather than politicians elected by the stupid hordes. If the masses are going to elect people that are provably useless, the masses should be stripped of their voting privileges for their own good. Democracy is not a panacea. Meritocracy is better. 4. Banks upset that the gov causes them to fail? Nationalize the fucking banks, duh. Banking is not high tech and should not be high tech. It should be a public utility that is the most conservatively run thing in the economy. Banks should be separated from investment entirely. Government should invest in high tech but only using the judgment of highly qualified meritocrats with proven knowledge elected by their specialist peers to oversee government investment within that specialty. Private investors should have no connection to banking. The root of all social problems is the fact that the most qualified and knowledgable academics and technologists have zero political power, while Chrstian pseudo-preachers hold all of it. Intelligent people (e.g. Those on hacker news) should be pushing technocracy and meritocracy and disempowerment of the idiot hordes who don't even know how to act in their own self-interet.

hnhg 14y ago

Read parent again. He didn't say they any of the things you're trying to refute.

marekmroz 14y ago

Poor and complicit regulation is not much better than no regulation at all. Deregulation does not necessarily mean that suddenly all rules and regulations are removed. It may also mean making the rules more and more lax, to the point that breaking the rule is no longer needed. On the other hand limiting resources of the regulator can also be very effective as a mean of deregulation. The fact that there are some poor and rarely enforced rules does not constitute regulation. On paper things may look as they are regulated, but in practice it may be a whole different story.

antidaily 14y ago

The FCIC pretty much concluded that deregulation an self-regulation is what caused the financial crisis. So while it may not be a magic bullet, it's better than what we have.

forensic 14y ago

It's better to describe regulators as captured rather than complicit. Regulators have no chance when the people they are supposed to regulate have hundreds of times more power than the regulators. Allowing unlimited wealth concentration guarantees that the most powerful private interests are always more powerful than government regulators.

smsm42 14y ago
Power would matter a lot if regulators knew exactly what to do, but lacked power to enforce it. Unfortunately, most frequently regulators have very little idea about where the next crisis would come from (count how many times "unexpectedly" is featured in economical reporting) and what to do to prevent it, and there are many contradictory opinions on these subjects. Often they even have very little idea about what exactly major players are doing and why, and lack the ability to foresee all the risks. Moreover, since regulators are appointed by politicians (there's no other way to do it in democratic society) they of course would be heavily influenced by political considerations, which may be not to the best of the regulated industry - e.g., if politicians want more people have access to certain loans, regulators would force banks to accept more risk on such loans, even if it doesn't make financial sense to them. And then if such loans blow up, the bankers would have a valid claim to be bailed out - after all, didn't regulators ask them to accept such risks?
- forensic 14y ago
  All of these are solvable problems. 1. Regulators lack visibility? Give them investigatory powers. 2. Regulators can't predict the next crisis? Maybe with bigger budgets they would have higher quality employees. All the talent works for the hedge funds who pay them literally hundreds of times more. If the person being regulated makes $1M/year the regulator needs more pay than that or there will be talent asymmetry. Obviously, the key issue here is that the financial sector gets paid way too much, way more than the value it produces. The profits are based on a rigged financial system. 3. Regulators appointed by politicians due to democracy? Cancel democracy and implement meritocracy. Require positions of power to be filled by civil servants with proven skill who have to pass tests, rather than politicians elected by the stupid hordes. If the masses are going to elect people that are provably useless, the masses should be stripped of their voting privileges for their own good. Democracy is not a panacea. Meritocracy is better. 4. Banks upset that the gov causes them to fail? Nationalize the fucking banks, duh. Banking is not high tech and should not be high tech. It should be a public utility that is the most conservatively run thing in the economy. Banks should be separated from investment entirely. Government should invest in high tech but only using the judgment of highly qualified meritocrats with proven knowledge elected by their specialist peers to oversee government investment within that specialty. Private investors should have no connection to banking. The root of all social problems is the fact that the most qualified and knowledgable academics and technologists have zero political power, while Chrstian pseudo-preachers hold all of it. Intelligent people (e.g. Those on hacker news) should be pushing technocracy and meritocracy and disempowerment of the idiot hordes who don't even know how to act in their own self-interet.