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I don't see any contradiction here? Both systems are opaque and vulnerable, and both may need government regulation. Some people would have it that the repeal o

I don't see any contradiction here? Both systems are opaque and vulnerable, and both may need government regulation. Some people would have it that the repeal of Glass-Steagall is what indirectly lead to the '07 crisis.

ArbitraryLimits 13y ago
Seriously. It bugs me when people take the '07 meltdown as proof that the banking system need to be left alone by the government. If the government's regulatory authority hadn't been curtailed, it wouldn't have had to rescue the banking system at all.
- FellowTraveler 13y ago
  The financial and banking system is the most heavily-regulated industry there is. The 2007 meltdown was caused by a number of abuses, but "lack of regulation" was not one of them. We most certainly do not have a free market in money, so we cannot blame the problems of the banking cartel on the "free market" when one does not exist.
  - anigbrowl 13y ago
    Repeating an assertion doesn't make it any more true.
    - FellowTraveler 13y ago
      "Repeating an assertion doesn't make it any more true." ===> In that case, deny it. Go ahead, present your case that banking and finance isn't the most cartelized, regulated, corrupt industry on earth.
      - srdev 13y ago
        Burden of proof is on the person making the claim. Thats you.
        FellowTraveler 13y ago
        Okay let's compare the financial industry with, say, the software industry... The financial industry: http://en.wikipedia.org/wiki/List_of_financial_regulatory_authorities_by_country http://en.wikipedia.org/wiki/List_of_financial_regulatory_au... The software industry: [Google] No results found for "list of software development regulatory bodies by country".
        anigbrowl 13y ago
        Not sure if you're serious or trolling. How about comparing the financial industry with some other closely regulated industry, such as pharmaceuticals or healthcare? Seems to me that it's rather easier to become a fund manager than a doctor, for example. Likewise the setup costs and regulatory burden of running a hedge fund seem rather lower than those of bringing a new drug to market.
        FellowTraveler 13y ago
        > How about comparing the financial industry with some other closely regulated industry, such as pharmaceuticals or healthcare? In fact, this is my whole point: that finance (and healthcare) are heavily-regulated, and that this is precisely the cause of their problems. You could never claim that our healthcare problems are the result of a free market, because there is no free market in healthcare -- just a giant cartel of heavily-regulated (protected) bureaucracies. Similarly, you could never claim that our monetary issues are the result of a free market, because there is no free market in money.
        anigbrowl 13y ago
        I think you need to rethink your definition of what constitutes a free market; at present it seems to be 'one where all participants are free to do anything.' That's superficially attractive but it's hard for it to be efficient due to information asymmetries, and a market that is inefficient is one which people are reluctant to enter and whose growth is thus limited. You could never claim that our healthcare problems are the result of a free market, because there is no free market in healthcare -- just a giant cartel of heavily-regulated (protected) bureaucracies. Well, I wasn't making that claim, but you appear to have a curiously binary view of these things. Healthcare in Europe, where I'm from, is in many ways far less competitive and far more heavily regulated, yet Europeans seem to have better outcomes despite lower public expenditure on healthcare. I attribute this primarily to the information asymmetries mentioned above.
  - deleted 13y ago
    [deleted]
  - wdewind 13y ago
    You see to be confused in thinking that "free market" means a market without regulation. It does not.
    - FellowTraveler 13y ago
      You seem to be confused in believing that regulated industries do not merge with the bodies that regulate them. We see this same protectionism time and time again. See the health care "industry" for example, which is actually just a bureaucracy designed to protect itself from competition, by way of government force.
      - deleted 13y ago
        [deleted]
  - pessimizer 13y ago
    I'd say that not requiring capital reserves for swaps like we do for other insurance is a lack of regulation that had a lot to contribute to the disaster that was the housing bubble. I'd say that removing the regulation that separated investment banking from deposit banking also contributed to the collapse of one deposit bank after another in the aftermath, banks that were relying on insurance companies that barely held any capital to cover their swaps. The fact that either no one in the financial industry committed a crime during the housing bubble, or there was no one to prosecute for crimes that were committed is proof that the financial industry is either effectively unregulated, or that there is no body that has an interest in enforcing any regulations that exist.
FellowTraveler 13y ago
The banking and financial industry is the most heavily regulated (and thus corrupt) industry that we have, surpassing even the health industry. Basically it's just a cartel. Saying that Bitcoin "may need government regulation" is like saying that Bittorrent "may need government regulation." The question is, how on earth can you regulate such things, when they are designed to be resistant to such threats? Let's not forget also, that policy consists of political decisions regarding the use and threat of force. Therefore we can never actually regulate Bitcoin. At best, we can only regulate how we plan to use violence against people who use Bitcoin.
- wdewind 13y ago
  > The banking and financial industry is the most heavily regulated (and thus corrupt) industry that we have, surpassing even the health industry. Basically it's just a cartel. I heavily disagree with your assessment that regulation is to blame. If anything the removal of regulation, specifically the repeal of the parts of Glass-Steagall that separated commercial and investment banks, is what caused the banking catastrophe. > Saying that Bitcoin "may need government regulation" is like saying that Bittorrent "may need government regulation." The question is, how on earth can you regulate such things, when they are designed to be resistant to such threats? No, despite using (sort of) similar protocols and having (sort of) similar names, these are not similar at all. Bitcoin will be regulated in these two, and probably more, ways: 1) It will be categorized as an instrument of value, in which case it can be taxed in USD, require licenses to transact with it etc. 2) It will be regulated at the point of currency exchange. > Let's not forget also, that policy consists of political decisions regarding the use and threat of force. Therefore we can never actually regulate Bitcoin. At best, we can only regulate how we plan to use violence against people who use Bitcoin. I'm not even sure I understand fully what you mean here. What do we regulate that can't be swapped for "bitcoin" in that sentence? IE: we can't regulate drugs, at best we can only regulate how we plan to use violence against people who use drugs.
  - FellowTraveler 13y ago
    > the repeal of the parts of Glass-Steagall that separated commercial and investment banks, is what caused the banking catastrophe. This is like saying that pulling a card from a house of cards is what "caused" its collapse. When in fact, the imposition of the unsustainable system onto us in the first place was the true problem. Everything else is just consequences. > despite using (sort of) similar protocols and having (sort of) similar names, these are not similar at all. Both are p2p protocols designed to enable censorship-resistance by eliminating centralized points of failure. Just as Napster was replaced by Bittorrent, so also E-Gold is replaced by Bitcoin. The persecution is actually what is driving the development of these liberating protocols. > What do we regulate that can't be swapped for "bitcoin" in that sentence? IE: we can't regulate drugs, at best we can only regulate how we plan to use violence against people who use drugs. This is exactly true! We can never "regulate" drugs (or Bitcoin) -- we can only regulate how we use _violence_ against people who use drugs (or Bitcoin.) But the question is, do we have a _right_ to use violence against people who are not thieves and murderers? And is it even possible to delegate such powers? For example, I have a right to defend myself using force. Therefore I have a right to hire a _bodyguard_ to defend me. Therefore we have the right to elect a _sheriff_ to defend us. (In fact it is the same right -- delegated.) But I do NOT have a right to beat and rob people. Therefore, neither do I have any right to hire a _bodyguard_ to beat and rob people. ...Therefore, neither does our _sheriff_ have any right to beat and rob people -- even if we voted for him to do so! Because you cannot delegate powers you never had. Perhaps you should be asking what makes us believe, as a society, that we have any right to use violence at all, except in defense from violence. Because if the authorities use violence for any other purpose, then aren't they the true criminals? Careful not to throw out the precedent from the Nuremberg Trials -- that just because someone is in authority, doesn't give them the right to victimize people. (Even if they were voted into power.)

ArbitraryLimits 13y ago

Seriously. It bugs me when people take the '07 meltdown as proof that the banking system need to be left alone by the government. If the government's regulatory authority hadn't been curtailed, it wouldn't have had to rescue the banking system at all.

FellowTraveler 13y ago
The financial and banking system is the most heavily-regulated industry there is. The 2007 meltdown was caused by a number of abuses, but "lack of regulation" was not one of them. We most certainly do not have a free market in money, so we cannot blame the problems of the banking cartel on the "free market" when one does not exist.
- anigbrowl 13y ago
  Repeating an assertion doesn't make it any more true.
  - FellowTraveler 13y ago
    "Repeating an assertion doesn't make it any more true." ===> In that case, deny it. Go ahead, present your case that banking and finance isn't the most cartelized, regulated, corrupt industry on earth.
    - srdev 13y ago
      Burden of proof is on the person making the claim. Thats you.
      - FellowTraveler 13y ago
        Okay let's compare the financial industry with, say, the software industry... The financial industry: http://en.wikipedia.org/wiki/List_of_financial_regulatory_authorities_by_country http://en.wikipedia.org/wiki/List_of_financial_regulatory_au... The software industry: [Google] No results found for "list of software development regulatory bodies by country".
        anigbrowl 13y ago
        Not sure if you're serious or trolling. How about comparing the financial industry with some other closely regulated industry, such as pharmaceuticals or healthcare? Seems to me that it's rather easier to become a fund manager than a doctor, for example. Likewise the setup costs and regulatory burden of running a hedge fund seem rather lower than those of bringing a new drug to market.
        FellowTraveler 13y ago
        > How about comparing the financial industry with some other closely regulated industry, such as pharmaceuticals or healthcare? In fact, this is my whole point: that finance (and healthcare) are heavily-regulated, and that this is precisely the cause of their problems. You could never claim that our healthcare problems are the result of a free market, because there is no free market in healthcare -- just a giant cartel of heavily-regulated (protected) bureaucracies. Similarly, you could never claim that our monetary issues are the result of a free market, because there is no free market in money.
        anigbrowl 13y ago
        I think you need to rethink your definition of what constitutes a free market; at present it seems to be 'one where all participants are free to do anything.' That's superficially attractive but it's hard for it to be efficient due to information asymmetries, and a market that is inefficient is one which people are reluctant to enter and whose growth is thus limited. You could never claim that our healthcare problems are the result of a free market, because there is no free market in healthcare -- just a giant cartel of heavily-regulated (protected) bureaucracies. Well, I wasn't making that claim, but you appear to have a curiously binary view of these things. Healthcare in Europe, where I'm from, is in many ways far less competitive and far more heavily regulated, yet Europeans seem to have better outcomes despite lower public expenditure on healthcare. I attribute this primarily to the information asymmetries mentioned above.
- deleted 13y ago
  [deleted]
- wdewind 13y ago
  You see to be confused in thinking that "free market" means a market without regulation. It does not.
  - FellowTraveler 13y ago
    You seem to be confused in believing that regulated industries do not merge with the bodies that regulate them. We see this same protectionism time and time again. See the health care "industry" for example, which is actually just a bureaucracy designed to protect itself from competition, by way of government force.
    - deleted 13y ago
      [deleted]
- pessimizer 13y ago
  I'd say that not requiring capital reserves for swaps like we do for other insurance is a lack of regulation that had a lot to contribute to the disaster that was the housing bubble. I'd say that removing the regulation that separated investment banking from deposit banking also contributed to the collapse of one deposit bank after another in the aftermath, banks that were relying on insurance companies that barely held any capital to cover their swaps. The fact that either no one in the financial industry committed a crime during the housing bubble, or there was no one to prosecute for crimes that were committed is proof that the financial industry is either effectively unregulated, or that there is no body that has an interest in enforcing any regulations that exist.

FellowTraveler 13y ago

The banking and financial industry is the most heavily regulated (and thus corrupt) industry that we have, surpassing even the health industry. Basically it's just a cartel. Saying that Bitcoin "may need government regulation" is like saying that Bittorrent "may need government regulation." The question is, how on earth can you regulate such things, when they are designed to be resistant to such threats? Let's not forget also, that policy consists of political decisions regarding the use and threat of force. Therefore we can never actually regulate Bitcoin. At best, we can only regulate how we plan to use violence against people who use Bitcoin.

wdewind 13y ago
> The banking and financial industry is the most heavily regulated (and thus corrupt) industry that we have, surpassing even the health industry. Basically it's just a cartel. I heavily disagree with your assessment that regulation is to blame. If anything the removal of regulation, specifically the repeal of the parts of Glass-Steagall that separated commercial and investment banks, is what caused the banking catastrophe. > Saying that Bitcoin "may need government regulation" is like saying that Bittorrent "may need government regulation." The question is, how on earth can you regulate such things, when they are designed to be resistant to such threats? No, despite using (sort of) similar protocols and having (sort of) similar names, these are not similar at all. Bitcoin will be regulated in these two, and probably more, ways: 1) It will be categorized as an instrument of value, in which case it can be taxed in USD, require licenses to transact with it etc. 2) It will be regulated at the point of currency exchange. > Let's not forget also, that policy consists of political decisions regarding the use and threat of force. Therefore we can never actually regulate Bitcoin. At best, we can only regulate how we plan to use violence against people who use Bitcoin. I'm not even sure I understand fully what you mean here. What do we regulate that can't be swapped for "bitcoin" in that sentence? IE: we can't regulate drugs, at best we can only regulate how we plan to use violence against people who use drugs.
- FellowTraveler 13y ago
  > the repeal of the parts of Glass-Steagall that separated commercial and investment banks, is what caused the banking catastrophe. This is like saying that pulling a card from a house of cards is what "caused" its collapse. When in fact, the imposition of the unsustainable system onto us in the first place was the true problem. Everything else is just consequences. > despite using (sort of) similar protocols and having (sort of) similar names, these are not similar at all. Both are p2p protocols designed to enable censorship-resistance by eliminating centralized points of failure. Just as Napster was replaced by Bittorrent, so also E-Gold is replaced by Bitcoin. The persecution is actually what is driving the development of these liberating protocols. > What do we regulate that can't be swapped for "bitcoin" in that sentence? IE: we can't regulate drugs, at best we can only regulate how we plan to use violence against people who use drugs. This is exactly true! We can never "regulate" drugs (or Bitcoin) -- we can only regulate how we use _violence_ against people who use drugs (or Bitcoin.) But the question is, do we have a _right_ to use violence against people who are not thieves and murderers? And is it even possible to delegate such powers? For example, I have a right to defend myself using force. Therefore I have a right to hire a _bodyguard_ to defend me. Therefore we have the right to elect a _sheriff_ to defend us. (In fact it is the same right -- delegated.) But I do NOT have a right to beat and rob people. Therefore, neither do I have any right to hire a _bodyguard_ to beat and rob people. ...Therefore, neither does our _sheriff_ have any right to beat and rob people -- even if we voted for him to do so! Because you cannot delegate powers you never had. Perhaps you should be asking what makes us believe, as a society, that we have any right to use violence at all, except in defense from violence. Because if the authorities use violence for any other purpose, then aren't they the true criminals? Careful not to throw out the precedent from the Nuremberg Trials -- that just because someone is in authority, doesn't give them the right to victimize people. (Even if they were voted into power.)