4 ms·

If there were a law that could prevent regulatory capture then I would say go for it, more regulation.

by awt 12y ago

chc 12y ago
With or without regulatory capture, I can't see how the problem we face is too much oversight on Wall Street.
- lukifer 12y ago
  The counterargument is that regulation hurts small players more than large ones. Citibank can afford an army of compliance officers; most of us can't. I'm generally pro-regulation, if the details are sensible, but regulatory capture is a real problem, and it is not an unreasonable stance that the cure is sometimes worse than the disease.
  - wpietri 12y ago
    Regulatory capture's a real issue, but it's not a given. For those interested in the topic, I highly recommend Shelia Bair's "Bull By The Horns", which is her account of running the FDIC up to and during the financial crisis. It left me with quite a bit of respect for the FDIC's approach, and for what solid regulation takes.
  - chc 12y ago
    That isn't really a counterargument; it's just a factoid. A counterargument would be something along the lines of "Regulation hurts small players more than large ones, and the scarcity of small players has been the biggest problem with Wall Street over the past decade because _____, therefore the problem with Wall Street is too much oversight."
- wyager 12y ago
  Why should people on wall street be forbidden from doing whatever investments they want to, insofar as they are contractually allowed? If you don't like how someone is investing, don't invest with them. If you think certain banks are behaving riskilly, don't give them your money. What are some counter-arguments to this? I.e. why is it a) moral and b) desirable to regulate the activity of wall street traders in addition to the laws they are automatically subject to (like anti-fraud laws)?
  - pyoung 12y ago
    I would imagine most of the laws and regulations are anti-fraud in nature. Outside of that, limiting the risk exposure of banks that carry FDIC insurance, or some other government backing, is in the interest in of all taxpayers. From my laymen's understanding, if you want to start a hedge fund, take some rich people's money, and gamble it all away, nothing is really stopping you. In fact people do it all the time.
    - eric_bullington 12y ago
      >take some rich people's money And there lies the rub. So the wealthy man can take advantage of start-up investing, but the government in its infinite wisdom, forbids the middle-class man from doing the same under penalty of imprisonment for the person offering the security.
      - smacktoward 12y ago
        Yes, it is truly a moral imperative that we allow people who can't afford to be ripped off access to the same "investment opportunities" as people who can. Freeeeeeeedom!
        wyager 12y ago
        You know how people always complain about the rich getting richer? That frequently happens because they're given exclusive access to those "rip-offs" you're claiming average people should be excluded from.
        wlphoenix 12y ago
        I'd argue that those sort of investments would be better gated by knowledge than available finances. There's no reason a early employ that made <$1m in a buyout shouldn't be allowed to invest 10k in another startup. He absolutely knows what he's investing in, and it's his choice if he's willing to take that risk.
        seanflyon 12y ago
- tvhiggins 12y ago
  imo its the fact that we're so reliant on 3-4 big banks as opposed to 100 banks. if it were more decentralized, US could afford less regulation and just let companies succeed/fail on their own. can't do that in the current climate
  - chc 12y ago
    I don't think it would look the way you imagine. There are lots of computer software vendors, but if you wiped out Apple, Microsoft and a few core Linux contributors, you'd pretty much wreck the computer world, even for people who directly use other vendors. The existence of smaller players does not negate the influence of the larger ones.

If there were a law that could prevent regulatory capture then I would say go for it, more regulation.

by awt 12y ago

If there were a law that could prevent regulatory capture then I would say go for it, more regulation.

chc 12y ago

With or without regulatory capture, I can't see how the problem we face is too much oversight on Wall Street.

lukifer 12y ago
The counterargument is that regulation hurts small players more than large ones. Citibank can afford an army of compliance officers; most of us can't. I'm generally pro-regulation, if the details are sensible, but regulatory capture is a real problem, and it is not an unreasonable stance that the cure is sometimes worse than the disease.
- wpietri 12y ago
  Regulatory capture's a real issue, but it's not a given. For those interested in the topic, I highly recommend Shelia Bair's "Bull By The Horns", which is her account of running the FDIC up to and during the financial crisis. It left me with quite a bit of respect for the FDIC's approach, and for what solid regulation takes.
- chc 12y ago
  That isn't really a counterargument; it's just a factoid. A counterargument would be something along the lines of "Regulation hurts small players more than large ones, and the scarcity of small players has been the biggest problem with Wall Street over the past decade because _____, therefore the problem with Wall Street is too much oversight."
wyager 12y ago
Why should people on wall street be forbidden from doing whatever investments they want to, insofar as they are contractually allowed? If you don't like how someone is investing, don't invest with them. If you think certain banks are behaving riskilly, don't give them your money. What are some counter-arguments to this? I.e. why is it a) moral and b) desirable to regulate the activity of wall street traders in addition to the laws they are automatically subject to (like anti-fraud laws)?
- pyoung 12y ago
  I would imagine most of the laws and regulations are anti-fraud in nature. Outside of that, limiting the risk exposure of banks that carry FDIC insurance, or some other government backing, is in the interest in of all taxpayers. From my laymen's understanding, if you want to start a hedge fund, take some rich people's money, and gamble it all away, nothing is really stopping you. In fact people do it all the time.
  - eric_bullington 12y ago
    >take some rich people's money And there lies the rub. So the wealthy man can take advantage of start-up investing, but the government in its infinite wisdom, forbids the middle-class man from doing the same under penalty of imprisonment for the person offering the security.
    - smacktoward 12y ago
      Yes, it is truly a moral imperative that we allow people who can't afford to be ripped off access to the same "investment opportunities" as people who can. Freeeeeeeedom!
      - wyager 12y ago
        You know how people always complain about the rich getting richer? That frequently happens because they're given exclusive access to those "rip-offs" you're claiming average people should be excluded from.
      - wlphoenix 12y ago
        I'd argue that those sort of investments would be better gated by knowledge than available finances. There's no reason a early employ that made <$1m in a buyout shouldn't be allowed to invest 10k in another startup. He absolutely knows what he's investing in, and it's his choice if he's willing to take that risk.
      - seanflyon 12y ago
tvhiggins 12y ago
imo its the fact that we're so reliant on 3-4 big banks as opposed to 100 banks. if it were more decentralized, US could afford less regulation and just let companies succeed/fail on their own. can't do that in the current climate
- chc 12y ago
  I don't think it would look the way you imagine. There are lots of computer software vendors, but if you wiped out Apple, Microsoft and a few core Linux contributors, you'd pretty much wreck the computer world, even for people who directly use other vendors. The existence of smaller players does not negate the influence of the larger ones.