# Kudos to Obama for Regulatory Review **URL:** \ **Category:** Great Debates\ **Created:** [January 18, 2011, 6:50pm UTC](https://boards.straightdope.com/t/kudos-to-obama-for-regulatory-review/568099 "2011-01-18T18:50:49Z")\ **Posts on this page:** 12\ **Page:** 3
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [January 22, 2011, 12:40am UTC](https://boards.straightdope.com/t/kudos-to-obama-for-regulatory-review/568099/41 "2011-01-22T00:40:45Z")
More to the point: Which regulations were being proposed by anyone before the crash which would have prevented it? It’s easy to say in hindsight that there should have been more regulation. But that presupposes that the government saw the problem coming but simply failed to take action. I see zero evidence of this. In fact, the government was every bit as much involved in creating this mess as anyone else. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [January 22, 2011, 2:18am UTC](https://boards.straightdope.com/t/kudos-to-obama-for-regulatory-review/568099/42 "2011-01-22T02:18:01Z")
> [@Sam\_Stone](#): > > It’s easy to say in hindsight that there should have been more regulation. But that presupposes that the government saw the problem coming but simply failed to take action. That, or else it failed anticipate the problem, and as a result, removed regulations that might have mitigated the disaster. Could it have happened that way too, Sam? ---
**Author:** ![Starving\_Artist](https://avatars.discourse-cdn.com/v4/letter/s/aeb1de/32.png) [@Starving\_Artist](https://boards.straightdope.com/u/Starving_Artist)\ **Post date:** [January 22, 2011, 2:49am UTC](https://boards.straightdope.com/t/kudos-to-obama-for-regulatory-review/568099/43 "2011-01-22T02:49:50Z")
I, too, applaud Obama for taking this step. But as others have said, it remains to be seen if any good will come of it. A big problem in dealing with government regulations and the beaurocracies that administer or enforce them is that making any significant headway in trying to effect change within those beaurocracies is nigh on to impossible. I remember JFK, after trying to effect change in the state department (IIRC), stating that trying to make a dent in the way things were done there was like pressing on a water balloon - you can make a dent in it but as soon as you release the pressure it goes right back to the way it was before. ---
**Author:** ![ElvisL1ves](https://avatars.discourse-cdn.com/v4/letter/e/5daacb/32.png) [@ElvisL1ves](https://boards.straightdope.com/u/ElvisL1ves)\ **Post date:** [January 22, 2011, 3:19am UTC](https://boards.straightdope.com/t/kudos-to-obama-for-regulatory-review/568099/44 "2011-01-22T03:19:12Z")
> [@Sam\_Stone](#): > > More to the point: Which regulations were being proposed by anyone before the crash which would have prevented it? Look up “Glass-Steagall” sometime. The repeal part is especially interesting. I do so love seeing the claim that the financial crash was due to too much regulation. 😃 Absolutely hilarious. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [January 22, 2011, 4:08am UTC](https://boards.straightdope.com/t/kudos-to-obama-for-regulatory-review/568099/45 "2011-01-22T04:08:38Z")
> [@Starving\_Artist](#): > > I, too, applaud Obama for taking this step. But as others have said, it remains to be seen if any good will come of it. A big problem in dealing with government regulations and the beaurocracies that administer or enforce them is that making any significant headway in trying to effect change within those beaurocracies is nigh on to impossible. I remember JFK, after trying to effect change in the state department (IIRC), stating that trying to make a dent in the way things were done there was like pressing on a water balloon - you can make a dent in it but as soon as you release the pressure it goes right back to the way it was before. _Bureaucracy_. ---
**Author:** ![Starving\_Artist](https://avatars.discourse-cdn.com/v4/letter/s/aeb1de/32.png) [@Starving\_Artist](https://boards.straightdope.com/u/Starving_Artist)\ **Post date:** [January 22, 2011, 4:27am UTC](https://boards.straightdope.com/t/kudos-to-obama-for-regulatory-review/568099/46 "2011-01-22T04:27:15Z")
I’ve been screwing up the spelling of that word all the way back to when **kaylasdad99** didn’t have me on ignore :D, as he was the one who always jumped at the chance to correct me on it back then. Anyway, I should have known to Google it by now. My mistake. Thanks for the correction. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [January 23, 2011, 11:45pm UTC](https://boards.straightdope.com/t/kudos-to-obama-for-regulatory-review/568099/47 "2011-01-23T23:45:08Z")
> [@elucidator](#): > > I repeat, its a trap. > > Obama announces this in vague and all-encompassing terms, offering to remove wasteful and useless regulation of business, business comes in their pants. (Suddenly, a bunch of high-end suits are available at Goodwill.) > > The Pubbies rush to cash in on the political advantage, crying to the skies about all the wasteful and pointless regulations they want removed, hallelujah and hossanah! > > Then Obama says, with sweet tones of bi-partisan comity, “OK. Which ones?” > > _Snap!_ Exactly. The Times ran an article noting that there really weren’t a lot of terrible stupid regulations to get rid of. The saccharin one came from the science changing to give the sweetener a clean bill of health. I’m still waiting for a list of high cost regulations which can be easily removed. In fact, we may come out behind on the deal, since the cost of examining them all may exceed the benefit of getting rid of a few. But the political benefit is there, so I’m all for this. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [January 24, 2011, 11:11am UTC](https://boards.straightdope.com/t/kudos-to-obama-for-regulatory-review/568099/48 "2011-01-24T11:11:30Z")
> [@YogSosoth](#): > > Just because some regulations have a bad cost-benefit ratio doesn’t mean they are bad regulations. What I was thinking was, cost to whom? Cost is often measured locally, subjectively; but laws are meant to work for the general welfare. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [January 24, 2011, 5:23pm UTC](https://boards.straightdope.com/t/kudos-to-obama-for-regulatory-review/568099/49 "2011-01-24T17:23:50Z")
> [@ElvisL1ves](#): > > Look up “Glass-Steagall” sometime. The repeal part is especially interesting. > > I do so love seeing the claim that the financial crash was due to too much regulation. 😃 Absolutely hilarious. I’m familiar with Glass-Steagall. Can you link to anyone in government proposing its reinstatement before the crash? And you do know that there’s no consensus that the repeal of Glass-Steagall was part of the problem, right? In fact, some analysts think it may have prevented even more failures than there were because of diversification. The repeal of Glass-Steagall had nothing to do with the real problems, which were artificially low interest rates, the securitization of mortgages, and the development of CDOs and other intermediate financial vehicles that buried information about risk. ---
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [January 24, 2011, 6:06pm UTC](https://boards.straightdope.com/t/kudos-to-obama-for-regulatory-review/568099/50 "2011-01-24T18:06:58Z")
> [@LonghornDave](#): > > There is a fairly big difference between deregulation and lack of regulation being there in the first place. What specifically was deregulated for finance or energy (other than the Gramm Leach Bliley Act, which was not a cause of anything) that caused either the financial meltdown or the environmental issues (BP and mining)? Furthermore, did the administration’s response to either (Financial Regulatory Reform as well as an overhaul to the Interior department) restore regulation that had previously been there and was lost due to de-regulation or did it simply add new regulations? How was Phil Gramm excluding derivatives from any regulation not a cause of the meltdown? And as for allowing corporations to self-regulate, I’ll leave it to fund manager barry Ritholtz to make the case : 1. Leverage: Large iBanks wanted to determine their own leverage regulations. They petitioned the SEC to have those old 1970s era Net Capitalization rules tossed out,]. The government agreed, and the 5 largest banks were allowed to determine their own leverage rules . . . \*How did that work out? \* 2. Deepwater Oil Drilling: The Oil Industry has been allowed not only to write their own regulations as to the safety requirements for offshore deep water drilling, but they were also the ones in charge of enforcing these rules! . . . \*How did that work out? \* 3. Derivatives: Underwriters didn’t want to be bothered with pesky rules that had reserve requirements that limited underwriting, counter-party disclosures, exchange trading rules, capital requirements, indeed, any oversight whatsoever . . . \*How did that work out? \* 4. Lend-to-securitize non bank mortgage underwriters: Rules were proposed both at the Federal Reserve level and in California (where most were located), but the decision was made to allow these “Financial innovators” top self regulate . . . \*How did that work out? \* 5. Glass Steagall: The repeal of legislation that kept Wall Street risk taking separate from Main Street banking was a decade prior to a Derivatives collapse, frozen credit market and the worst recession since the great depression . . . \*How did that work out? \* 6. Federal Pre-emption: Various states had regulations in effect to prevent predatory lending. Responding to Bank requests, the regulations were removed by Federal mandate (so much for states rights) to allow “unfettered banking.” . . . \*How did that work out? \* 7. Abdication of traditional lending standards: Federal Reserve enforcement of lending rules requiring lenders to verify the borrowers ability to repay loans were ignored. This allowed banks to sell products such as 2/28 ARMs, Interest-Only Loans, and Negative Amortization mortgages without any oversight . . . \*How did that work out? \* The list goes on and on. We could talk about Food safety, products that strangle infants, unsafe effluent discharges into drinking water, etc. Suffice it to say that self-regulation by corporate entities has been a complete and unmitigated disaster. [Corporate Self-Regulation: How did that work out? - The Big Picture](http://www.ritholtz.com/blog/2011/01/corporate-self-regulation-how-did-that-work-out/) ---
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [January 24, 2011, 6:13pm UTC](https://boards.straightdope.com/t/kudos-to-obama-for-regulatory-review/568099/51 "2011-01-24T18:13:16Z")
> [@Sam\_Stone](#): > > More to the point: Which regulations were being proposed by anyone before the crash which would have prevented it? > > It’s easy to say in hindsight that there should have been more regulation. But that presupposes that the government saw the problem coming but simply failed to take action. I see zero evidence of this. In fact, the government was every bit as much involved in creating this mess as anyone else. The government was every bit as much involved because they were the ones who scrapped legislation and regulations that would have prevented the meltdown. It’s _lack_ of governence and _lack_ of regulation that caused the meltdown, not too much regulation. It’s actually lack of regulation that’s to blame for job losses, not too much regulation ; > **[The Anti-Regulators Are the "Job Killers" - The Big Picture](https://ritholtz.com/2011/01/the-anti-regulators-are-the-job-killers/)** > > Bill Black is an Associate Professor of Economics and Law at the University of Missouri – Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public... ---
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [January 24, 2011, 6:15pm UTC](https://boards.straightdope.com/t/kudos-to-obama-for-regulatory-review/568099/52 "2011-01-24T18:15:47Z")
> [@Sam\_Stone](#): > > I’m familiar with Glass-Steagall. Can you link to anyone in government proposing its reinstatement before the crash? > > And you do know that there’s no consensus that the repeal of Glass-Steagall was part of the problem, right? In fact, some analysts think it may have prevented even more failures than there were because of diversification. The repeal of Glass-Steagall had nothing to do with the real problems, which were artificially low interest rates, the securitization of mortgages, and the development of CDOs and other intermediate financial vehicles that buried information about risk. The GS repeal did allow firms like Citi to go to the dog track with hundreds of billions of deposits that had previkously been walled off and unavailable for them to gamble with though, right? Hundreds of billions which they lost and then needed the government to bail them out on, right? Who are these “some analysts”? [Previous page](https://boards.straightdope.com/t/kudos-to-obama-for-regulatory-review/568099.md?page=2)