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How Do You Spell “Scapegoat”? “D-E-R-E-G-U-L-A-T-I-O-N”

Over at Reason, Catherine Mangu-Ward has a long piece that helps to deflate the notion that Congressional Democrats and many on the left have been pimping lately: namely that “excessive deregulation” is chiefly to blame for our current financial woes.

I don’t really have time to summarise the whole thing right now, so I’ll just offer this quote:

Letting Freddie and Fannie get away with murder wasn’t deregulation. It was bad governance. And letting deregulation take the primary blame for a credit-fueled housing bubble and its aftermath isn’t an argument. It’s misdirection.

Today’s economy has done a lot to discredit the free market in the minds of a lot of people. Nanci Pelosi and friends are doing their best to put even more nails in the coffin and drooling over the prospect of the Federal Government assuming even more control over the commanding heights of the economy. Why let them go completely unchallenged? Read the rest.

  1. Chris says:

    Bloomberg’s FOIA turned down by Fed

    Apparently the Fed doesn’t want anyone to know who the recipients of $2 Trillion in taxpayer-funded loans were/are.

  2. Vincent says:

    It’s like a rainbow in the dark!

  3. Chris says:

    “What’s happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics.”

    What do you guys/gals think?

  4. Chris says:

    “The government should not be intervening in the market at all.”

    Well the hypocrisy with those involved is that they argue the market as the cure-all for everything…until the market threatens their jobs, portfolios, and so on. Then, these same schmucks beg for help. Freemarketeers who don’t mind watching the market burn off the excess fat and ‘correct’ itself get a pass in my book. They are consistent. Pro-regulation types who step in to regulate and help are also consistent. It’s the people who play both sides of the coin that annoy me.

    I don’t think the bailout bills can be looked at as a whole. They are playing different roles. The first one didn’t really do much of anything, or so it seems. The auto bail seems to be more targeted and the money injected there actually leads to something being created (i.e. cars). At least that is tangible, even though that might not be better. I honestly don’t know enough to state anything matter-of-factly. I do think that in any case where money is being handed out, taxpayer money, that stipulations should be in place. Either there are guarantees on returns, shares of companies being owned, stipulations on where the money goes (i.e. GM shouldn’t keep churning out shit cars that can’t compete with Asia), and so on. Just handing money over seems ludicrous to me.

    Oh, and I’m talking about pendulum swings because everything being said seems to point to one extreme or the other. My “answer” was also alluding to what caused it….not what can solve it.

    I’m not a dumbass, and the more I read about this stuff the more confusing it all gets. I don’t think it is a very easy situation to sort out.

  5. Vincent says:

    Actually, it

  6. Antovich says:

    Actually, it

  7. Timothy says:

    I think the answer is, basically, that nobody knows quite what the fuck happened.

    I’m willing to point to institutional factors like complicated regulatory schemes coupled with a shareholder drive for increased EPS creating an incentive for really exotic risk/debt instruments. Once they got exotic enough, nobody understood them, which means prices don’t tell you what they should blah blah blah counter party risk…blah blah blah recession cakes.

  8. Chris says:

    And the pendulum swings to the opposite extreme…..

    Isn’t the answer somewhere between the government doing what it does best and private corporations doing what they do best….with the end result being one of the worst recessions (potentially anyway) we’ll experience?

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