Wrong Ghosty, I can complain about it because it is unfair, if nobody owns the land and someone takes it than you have staked out a claim to something that is not yours. If we give all the land back to the Earth then you have stolen from the Earth and will be punished.

Okay jimgov, tell us: what regulatory agencies did George W. abolish? What regulations did the Bush administration repeal that were responsible for the collapse?

None of the college economics teachers I've heard from over the years saw this coming. And the ones you're listening to are saying that everything is getting better and it's all going to be okay. Why? Because their statistical analysis (based on flawed data) says so! These people need to climb down from their ivory towers and have a look with their own eyeballs at the world the rest of us inhabit.

jimgov,

Tim Geitner recently admitted (among other things) that the Board of Governors is selected by the member banks and then approved by the president, quite a different process than what you quoted:

http://www.youtube.com/watch?v=JtwVRM0OG58

Well, since this has been happening for over a decade, I won't. Educated people know that we have been deregulating for about 15 years, give or take. Read a paper. Look at the news. Be a part of the solution. And just because you make wild accusations doesn't make you right. It just makes you loud.

http://www.federalreserve.gov/pf/pdf/pf_1.pdf That is where I got it. And I don't think it is different. The quote said appointed by the president. That is what he does.

Did you get that out of an encyclopedia? That's what it looks like. I don't take you seriously as you obviously are trying to defend an ideological opinion without the facts to back it up. <<hold on a minute and I'll find the proof that the Federal Reserve answers to no one.

@TGM, I am impressed. That was a very well well explained summary of the unintended consequences of regulation. If you don't know what the rules are going to be in 4 years, yet alone 4 months, how can you make rational decisions? The government should not be in the business of encouraging specific behaviors, and their favorite tools, the IRS tax code and the FED, for doing so need to be taken away. (No I am not saying there shouldn't be any taxes)

Iceray, you are claiming fairness as a value.

Values only can make sense in the context of humans, because only the sentient (and intelligent, in a biological sense) can understand a value in anything. For instance, a table cannot be valuable without anyone there to use it.

Fairness could very well be a value, in the context of human life. But what is fairness? Some sense of equality. Well, equality can be achieved by destroying all life. That way we are all equal, and have achieved the value of 'fairness'. But value is only sensible in the context of life, so destroying all life destroys all values, it doesn't achieve them. Therefore we have a contradiction because fairness is a value.

Even so, when you talk about fairness, you imply that everyone has a claim to the land. An ownership of it.

Finally, the earth is non-sentient, so is not able to own property, the concept of 'stealing from the earth' doesn't make sense. Not to mention that it was Marx who first taught that the earth should be exploited without care for the environment for humans' ends.

Wow C-K. I just want to give you facts. Isn't that what you want? Or do you just want to argue a crazy argument that cannot be defended? I will give you facts, but I won't listen to rantings without reason.

jimgov, please look again at my longest post about economics. Bush certainly was not deregulating, and nor was Clinton before him.

Here you go. Listen carefully as he says it quite distinctly.

http://www.youtube.com/watch?v=pVmxQsvj6lo&feature=related

And thank you for the compliment josh. :)

I saw the post. I just think you are wrong. Here is one quote (sorry C-K) about the Clinton deregulation's. n agreement between the Clinton administration and congressional Republicans, reached during all-night negotiations which concluded in the early hours of October 22, sets the stage for passage of the most sweeping banking deregulation bill in American history, lifting virtually all restraints on the operation of the giant monopolies which dominate the financial system.

The proposed Financial Services Modernization Act of 1999 would do away with restrictions on the integration of banking, insurance and stock trading imposed by the Glass-Steagall Act of 1933, one of the central pillars of Roosevelt's New Deal. Under the old law, banks, brokerages and insurance companies were effectively barred from entering each others' industries, and investment banking and commercial banking were separated.

And given that it was mortgage banking, not the investment banking that collapsed, how did that cause the boom which inevitably led to the bust?

jimgov, Appealing to Authority doesn't make you right. If I'm such a dumb ignorant hick, it should be easy to prove.

Why are you separating the two? They are all so intertwined since deregulation that you can't tell one from the other. And that one law wasn't the only one. Like I said, we deregulated for a long time and it finally came back to bite us in the butt.

Make a point with proof Tolstoy. I never said anything about you being a dumb ignorant hick. Why are you trying to put words in my mouth. And what exactly do you mean by Appealing to Authority? You mean stating facts? I know. Those can get in the way some time.

Thanks Jim! You've proven my point for me. What a guy. If you read what the agreement actually states it's giving the Banking institution free reign to do whatever it wants!! YOu should try reading it sometime. Here, I'll quote it for you.

"Financial Affiliations

* Eliminates many Federal and State legal barriers to affiliations among banks and securities firms, insurance companies, and other financial service providers, including provisions of the Bank Holding Company Act of 1956 and Section 20 of the Banking Act of 1933 (commonly referred to as the "Glass-Steagall Act"). Full affiliation can now occur between the entities.

* Provides financial services organizations with flexibility in structuring new financial affiliations through a holding company structure, or a financial subsidiary (with certain limitations on activities and appropriate safeguards).

* Establishes functional regulation for affiliated entities. Accordingly, banking activities will be regulated by banking regulators, securities activities will be regulated by securities regulators, and insurance activities will be regulated by insurance regulators. The Federal Reserve Board will serve as the umbrella supervisor for the holding companies themselves, and in certain cases may examine the functionally regulated subsidiaries.

* Permits bank holding companies that qualify as Financial Holding Companies ("FHC") to engage in an expanded array of activities, and to acquire companies engaged in such activities, that are financial in nature, incidental to, or complementary to financial activities, subject to certain Federal Reserve Board restrictions. For example, the Act designates the following as permissible FHC activities: underwriting; dealing and market making without any revenue limitation (such as sponsoring and distributing all types of mutual funds); operating investment companies; insurance underwriting and agency activities; merchant banking; and insurance company portfolio investments.

* Creates a new investment holding company structure under the Securities and Exchange Act.

* Establishes a mechanism for coordination between the Federal Reserve Board and the Secretary of the Treasury ("the Secretary") regarding the approval of new financial activities for both holding companies and national bank financial subsidiaries.

Operation of State Law

* Reaffirms the McCarran-Ferguson Act recognizing the primacy and legal authority of states to regulate insurance activities of all persons, including acting as the functional regulator for the insurance activities of federally chartered banks. The Act provides for thirteen general "safe harbor areas" for state insurance regulation. Regulation outside of these safe-harbor provisions is subject to the legal standard set forth in the United States Supreme Court decision in Barnett Bank v. Nelson, 517 U.S. 25 (1996).

Subsidiaries of National Banks

* Financial subsidiaries of National Banks may engage only in "financial activities" (as described above), with four exceptions, in which case the activity must be done in FHC affiliates, these exceptions are for: (1) insurance or annuity underwriting; (2) insurance company portfolio investments; (3) real estate investment and development; and (4) merchant banking.

Brokers & Dealers

* The Act repeals the general bank exemptions from the definition of broker and dealer under the Federal securities laws. Certain limited exemptions have been retained to facilitate activities in which banks have traditionally engaged.

* The Act also requires the SEC to act by rulemaking prior to seeking to regulate any bank sales of newly developed hybrid products. Hybrid products are any product not identified in the Act as an "identified banking product."

Redomestication of Mutual Insurers

* Allows for mutual insurance companies to redomesticate to another state and reorganize into a mutual holding company or stock company. This provision only applies to insurers in states which have not established reasonable terms and conditions for allowing mutual insurance companies to reorganize into a mutual holding company.

National Association of Registered Agents and Brokers

* Provides for the creation of a uniform insurance agent and broker licensing system if a majority of the states do not establish uniform or reciprocal licensing laws of their own within three years.

The National Association of Insurance Commissioners and its member state insurance regulators have already undertaken steps to create such a uniform licensing system in order to avoid the creation of such a national association. Federal Home Loan Bank System

* Eliminates the mandatory FHLBank membership for Federal savings associations. Small bank members are given expanded access to FHLBank advances.

ATM Fee Reform

* Requires operators of ATMs who impose a fee for use of an ATM by a non-customer to post a notice on the machine and on the screen that a fee will be charged and the amount of the fee.

Community Reinvestment Act

* Requires that Federal bank regulators prohibit banks from participating in the new financial affiliations if, at the time of certification, any bank affiliate had received a less than "satisfactory" Community Reinvestment Act rating.

* Requires parties to a CRA protest agreement to fully disclose the terms of the agreement and make them available to the public; each participant in a CRA agreement must file an annual report disclosing the use of resources provided in the agreement.

Unitary Thrift Holding Company Provisions

* Amends the Home Owners' Loan Act to prohibit (except for corporate reorganizations) new unitary savings and loan holding companies from engaging in nonfinancial activities or affiliating with nonfinancial entities.

Privacy

* Includes provisions providing consumers with certain protections with respect to the transfer and use of their "nonpublic" personal information by financial institutions, including giving consumers the option to "opt out" of having their personal financial information shared with nonaffiliated third parties, subject to certain exceptions.

S Corporations

* Requires the General Accounting Office to study and report to Congress within six months on revisions to S Corporation rules to permit greater access by community banks to S Corporation treatment.

The full text of the Financial Services Modernization Act of 1999 may be found on the Library of Congress' Thomas Website at http://thomas.loc.gov/cgi-bin/bdquery/z?d106:s.900."

As for the Fed, it is an "independent" agency of the government for good reason. So long as we are to have a nation-state with its own printed currency, it requires that somebody control the supply of that currency.

Allowing politicians to do so is simply foolish -- there are countless instances of overinflated currencies around the world (Argentina, Zimbabwe, prewar Germany) owing to a political desire to claim seigniorage on the printing of the currency.

In the end, someone has to make the decision on the supply of money. And since the supply of money directly corresponds to the national interest rate, that same person has indirect control of the interest rate.

No matter how much you want to blame Greenspan or Bernanke or the Board of Governors for making bad decisions, someone has got to do it, and as far as mortal man can predict what is theoretically an utterly unpredictable market, they have done a damn good job.

Well, the point is that I have traced a line from the regulation (cause) to the boom and bust (effect)

You have asserted that we know that deregulation causes recessions because of the current crisis and the 1930s (a hasty generalisation), and now you cannot demonstrate how that deregulation actually caused this recession, but are rather appealing to a combination of the fact that we know that deregulation causes recessions (which is a circular argument) and that we had some deregulation before a recession (post hoc) whilst ignoring that there were other regulation increases all around (biased sampling).

Your argument doesn't work.

And your point is? That you can find the act in question? Or that it wasn't deregulation? You are proving my point, unless I am misreading this.

So ghost, you are saying that if there were never regulations that there would never have been a problem? Is that right?

I agree bbdaniels.

"No matter how much you want to blame Greenspan or Bernanke or the Board of Governors for making bad decisions, someone has got to do it, and as far as mortal man can predict what is theoretically an utterly unpredictable market, they have done a damn good job.


bbdaniels, why can't you allow the price of borrowing be determined by market forces, just like we allow the price of bread to be determined by market forces? It is simply not true to say that somebody has to decide on an interest rate, just as it isn't true that somebody has to decide upon the "base price" of bread.

TGM - concur. Over-regulation can cause crises as easily as under-regulation. Just try and open a business in Russia and you'll learn why very quickly.

Also, government support of the banking industry has been instrumental in ensuring the safety and stability of the finance sector since the Great Depression. The FDIC and the conception of modern deposit insurance has underpinned banks for nearly a century, and without the explicit support of the government, banking would be a much less fruitful endeavor.

bbdaniels, have you ever asked yourself who does run the federal reserve? What powers that we don't meet or vote for but control the majority of the nations wealth control the federal reserve? What policies are being implemented because these economic powers want to benefit from these policies? You should. If you do you will see a clear an obvious path to the wealth of a few.

Ghost, where is your proof? Has this been done on a scale the size of the US economy before? It is one thing for this to work in theory, but another to work in reality.

"So ghost, you are saying that if there were never regulations that there would never have been a problem? Is that right?"

I am saying that without the regulations we wouldn't have had this crisis. I cannot say what specifically would happen in a world that has never existed.

However, the size of the real estate bubble was a direct effect of government activity. It would never have been able to grow so large before going bust without the government (either directly or indirectly) and the Fed propping it up.

There would be recessions under genuine capitalism, it would be absurd otherwise, but they would be far less severe, and would be joined not by growth in spending unmatched growth in production, but by genuine, funded increases in the economy.

TGM -- somebody has to set the interest rate if you are to maintain a sovereign, independent currency. The alternative is a gold-standard system, and that proved to be even more dangerous politically than the current one.

Could you imagine if the dollar could fall 30% or more in value in a single day? Shocks like that happened throughout Latin America and even in Great Britain under fixed regimes, and countries which needed to adjust their monetary policy to correct market imbalances were left without the ability to do so.

Argentina again has abandoned a monetary-board system because it leaves *no* flexibility, and it leaves a nation-state inordinately vulnerable to instability and attacks.