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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" w

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.
        FellowTraveler 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.' My definition would be, "one without violence and coercion, enabling decisions to be made based on voluntary choices." > 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. "Competitive" ? I know a doctor in Alaska who was aghast at the high prices charged by the monopoly hospital in his region. He decided to open a surgery center, so as to offer better service at lower prices. Unfortunately he discovered that competition is illegal. You cannot open operating rooms, you see, without first obtaining a "certificate of need" from the State, certifying that your community "needs" more operating rooms. And of course, such certificates are never actually handed out, since the state boards are always manned by hospital flunkies. Does that sound like a free market to you? There is no competition in American health care. I'm also surprised at your characterization of European health care as being "far more heavily regulated" in contrast to American health care. You must not realize just how heavily regulated American health care is. The American health care system is a combination of socialism and fascism, and has been for quite some time. It features all manner of central planning, forced subsidies, regional monopolies, welfare programs, hospitals and insurance "companies" protected from any competition by legislation, unfunded mandates, price charts, and tax authorities. The problems of health care in America are the problems of socialism and fascism, because that is what we practice. We do not have the benefits of the free market because we do not have a free market. > yet Europeans seem to have better outcomes Saying that Europeans have "better outcomes" than Americans (with regards to health care) is like saying that Cubans have "better food" than North Koreans. You are comparing two authoritarian systems, neither of which have any semblance of a free market. Coercion does not innovate -- it does not lower prices, nor does it improve service. Even in Europe: "While Sweden is a first world country, its health care system - at least in regards to access - is closer to the third world. Because the health care system is heavily-funded and operated by the government, the system is plagued with waiting lists for surgery. Those waiting lists increase patients' anxiety, pain and risk of death." http://www.nationalcenter.org/NPA555_Sweden_Health_Care.html http://www.nationalcenter.org/NPA555_Sweden_Health_Care.html
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.

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.
        FellowTraveler 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.' My definition would be, "one without violence and coercion, enabling decisions to be made based on voluntary choices." > 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. "Competitive" ? I know a doctor in Alaska who was aghast at the high prices charged by the monopoly hospital in his region. He decided to open a surgery center, so as to offer better service at lower prices. Unfortunately he discovered that competition is illegal. You cannot open operating rooms, you see, without first obtaining a "certificate of need" from the State, certifying that your community "needs" more operating rooms. And of course, such certificates are never actually handed out, since the state boards are always manned by hospital flunkies. Does that sound like a free market to you? There is no competition in American health care. I'm also surprised at your characterization of European health care as being "far more heavily regulated" in contrast to American health care. You must not realize just how heavily regulated American health care is. The American health care system is a combination of socialism and fascism, and has been for quite some time. It features all manner of central planning, forced subsidies, regional monopolies, welfare programs, hospitals and insurance "companies" protected from any competition by legislation, unfunded mandates, price charts, and tax authorities. The problems of health care in America are the problems of socialism and fascism, because that is what we practice. We do not have the benefits of the free market because we do not have a free market. > yet Europeans seem to have better outcomes Saying that Europeans have "better outcomes" than Americans (with regards to health care) is like saying that Cubans have "better food" than North Koreans. You are comparing two authoritarian systems, neither of which have any semblance of a free market. Coercion does not innovate -- it does not lower prices, nor does it improve service. Even in Europe: "While Sweden is a first world country, its health care system - at least in regards to access - is closer to the third world. Because the health care system is heavily-funded and operated by the government, the system is plagued with waiting lists for surgery. Those waiting lists increase patients' anxiety, pain and risk of death." http://www.nationalcenter.org/NPA555_Sweden_Health_Care.html http://www.nationalcenter.org/NPA555_Sweden_Health_Care.html

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.