Maybe it should be in debates, but since it’s being pushed as an election platform I’ll put it here.
GOP argument. Excess intrusive regulation inhibits corporation innovation and profitibility, plus the fair housing act forced to the bankers to write mortgage loans they knew were bad, which lead to the meltdown. which lead to unemployment.
Dem argument, poor oversight plus predatory lending led to rampant risk taking bad securities being fobbed off as good, and the economic meltdown and unemployment.
That both sides are cherry picking their “facts” to fit their argument, is probably obvious to anybody that isn’t blindly partisan. Which side is telling the fatter baldface lies, probably depends on your chosen party as well.
If elected, the right will push their deregulatory agenda - whether their premise is correct or not. It’s what their corporate masters want. And they’ve convinced their supporters will put folks back on the path to prosperity.
If elected, the left will actually DO, what? … (crickets chirping)… still waiting… BEEN waiting since the 111th Congress… Is there any fervent commitment to re-instate Glass-Steagall? To get Dodd-Frank off life support? To ensure regulations ARE common sense, AND work like they are supposed to? To fairly enforce those already ON the books before simply adding more? To lock the revolving door between regulatory agencies and industry?.. If not, why not?
And, if you are partisan, but not blindly so, can you 'splain why you support what you do?
The problem with the question is that the GOP has framed it as an over/under proposition, and they do this by underscoring the cost of enforcing/complying with regulation (more regulation -> higher costs -> fewer jobs). They’ve effectively set the terms of the debate (at least publically) such that any proposed regulation is considered a potential job-killer, as if there’s a strict inverse relation between the amount of regulation and the amount of employment.
I disagree completely with the premise of the question. Nobody necessarily wants more regulation; what they want is effective regulation, which is measured against results. While I concede that cost should be a part of that evaluation, IMO it’s pretty far down the list.
Agreed, it’s just another false dilemma. It you disagree with us, you’re trying to destroy America. If you support environmental (or health, or safety, etc.) regulations than you just want big government for its own sake. If you think takes should be higher you’re a socialist.
OK, besides the mistake of letting the Rs frame the debate, what HAVE the Ds been doing?
Yes, I’m aware that O has a commission supposedly working on suggestions for environmental regulation revisions… reportedly with a bunch of industry insiders on it.
Financial regulatory reform? – I’m not hearing much. Is it just not a priority? Not going to be a major platform?
Now, as for the GOP, I DID find a kernel of truth in their spiel. Unfortunately, it’s probably un-intended… Around here we have lots of older coal fired power plants. They are obsolete, but the current approval process means that new ones cost more than keeping the old ones patched together, even if they don’t end up blocked.
The current plants are, however, mandated to be retrofitted with emission scrubbers. — These scrubbers are very expensive and breakdown prone. The plant owners have found that paying the fines is less expensive than the scrubbers… So should the fines get higher or the regulations get stiffer… requiring even more expensive technology that may work just as well as the current scrubbers (don’t) = the cost curve could get bent sharply upwards.
Now, the power companies will NOT eat it, but will pass the higher cost along to the consumers. many of whom are poor or otherwise on fixed incomes and are struggling with energy costs that are too high now. … Wait, just forget I mentioned it! If they find out one of their ideas actually benefits poor folks, they’ll abandon it in a heartbeat!
The CDOs that swamped the US economy were the DIRECT RESULT of deregulation, specifically, the repeal of Glass-Steagall and it’s replacement by Gramm-Rudman back in the Clinton Administration.
The problem is, Wall Street now owns BOTH political parties. The Obama Admin. and the Democratic Congress never really tried to get Glass-Steagall or something like it back in place, although arguably it is the single most important thing that Washington needs to do to prevent another economic collapse. Neither the Dems nor the Pubbies are going to anger the powers that control them, i.e., the financial industry.
Everybody pretty much knows this, that’s what Occupy Wall Street is all about.
Can you elaborate? Why couldn’t the i-banks have created the structured products without initially having had them on their “Group wide” balance sheet through their sister-company depository banks? The latter had an incentive to securitize those loans to free up capital, whether the securitization was done under their same roof or otherwise, didn’t they? Isn’t this how it was done prior to Gramm-Rudman? And how can we be sure to what extent allowing bank holding co’s did drive the incredible growth in the 2000’s, as opposed to the booming of the property market in general, creation of CDS’s, which helped build liquidity around the CDOs, new and faster pricing models, and other factors?
Banks were forbidden to get involved in the securities market under Glass-Steagall. Allowing banks to do this was the whole point of Gramm-Rudman, under the rubric of “competitiveness.”
There was a court case about whether institutions could take deposits and make loans without being banks. It was denied. I wrote a headline about it, which unfortunately was rejected by my editor. It was : No Nonbank Banks, Says Says Judge Judge. I still smart over it.
There was another piece of legislation, cited in this thread, that allowed ARMs and such. Even back in the 80s there were people who were saying that ARMS would eventually lead to a bank collapse, as the basic assumption, that wages would always go up, was unreasonably optimistic. Boy were they right!
Glass-Steagall is the lynchpin, but there was this whole “regulation is bad” thing that the conservatives and Republicans are still clinging to, that contributed to the severity with which the bubble burst. Basically, bankers, real estate pros, and the entire financial industry are reckless, foolish greedheads and always will be, and the only thing that prevents them from robbing us all blind is sound laws and strictly enforced regulations. They are no different morally than the people who rob banks at gunpoint, except in some cases, they own the banks.
The DEMs are essentially corporatists too, but they are still uncomfortable openly advocating for less regulation as a principal. 'Cause that’s what the other guys do, and they’re not the other guys!
They know that their core voters are still regulation minded, so they make pronouncements to maintain the votes, but then…just never seem to get around to doing anything about it once in office. Kinda like the Republicans and abortion…
It’s kinda obvious that the financial industry owns the Democrats. Sad, but obvious. The Republicans are owned as well, but they are more like cultists than employees. So Occupy Wall Street is a brilliant move … gets right to the heart of the problem … Washington is not worth occupying any more … it is no longer a seat of power in America, compared to Wall Street.