The pre-regulation environment was not a modern information economy like ours is today. In today's world, financial regulation is created at the behest of industry to create the appearance of responsible management.
Much like a seatbelt made of paper, financial regulations are for appearances only, as the recent massive crisis should illustrate profoundly.
Financial firms are the top donors to both political parties and are the recipients of unprecedented handouts. The idea that we have any sort of meaningful financial regulation at all is absurd.
The best evidence of this is how people nitpick about a tangential but easily sound-bitable thing like marking to market or the SEC jumping on Groupon after there's already blood in the water. They bear no impact on the quality and scope of governmental oversight over the financial system, yet the public is supposed to believe that tales like these are evidence that oversight is occurring.
The most charitable argument in favor of the SEC is that it's understaffed/underfunded and must focus on high profile enforcement actions. In reality, it's a sham agency whose role is to fool the public into thinking that the financial services industry is regulated in a way beneficial to the public.
Even today, the core problems that actually caused the recent crisis have not been addressed. These are the government programs that artificially elevate housing prices and the conflicts of interest had by ratings agencies who depend on the business of those whose products they are intended to rate.
It's important to realize that we live in an economy where 50% of capital is allocated by the government and where the private/public partnership of the financial industry and regulators has an extremely large impact on day to day life.
Much like a seatbelt made of paper, financial regulations are for appearances only, as the recent massive crisis should illustrate profoundly.
Financial firms are the top donors to both political parties and are the recipients of unprecedented handouts. The idea that we have any sort of meaningful financial regulation at all is absurd.
The best evidence of this is how people nitpick about a tangential but easily sound-bitable thing like marking to market or the SEC jumping on Groupon after there's already blood in the water. They bear no impact on the quality and scope of governmental oversight over the financial system, yet the public is supposed to believe that tales like these are evidence that oversight is occurring.
The most charitable argument in favor of the SEC is that it's understaffed/underfunded and must focus on high profile enforcement actions. In reality, it's a sham agency whose role is to fool the public into thinking that the financial services industry is regulated in a way beneficial to the public.
Even today, the core problems that actually caused the recent crisis have not been addressed. These are the government programs that artificially elevate housing prices and the conflicts of interest had by ratings agencies who depend on the business of those whose products they are intended to rate.
It's important to realize that we live in an economy where 50% of capital is allocated by the government and where the private/public partnership of the financial industry and regulators has an extremely large impact on day to day life.