I dispute that something as broad as a civilization, made up of millions or billions of individuals, could be said to have a singular “point”. Rather, those individuals seek lives that are to their liking, and the civilization should be able to facilitate that.
And you know this for a fact because…?
Well, you could start by looking at the fact that the U.S. poverty line is about twice the world average income, and no one is happy in the U.S. if they’re living near the poverty line, even if they’re living completely on government benefits. The poor in America tend to have televisions, cell phones, internet access, cars, homes, washers and dryers, access to education and health care, and pretty much all the trappings of ‘the good life’ as measured by the rest of the world. But they’re not satisfied.
And in fact, the Democrats have been moving away from being the party of the poor and disadvantaged, and are increasingly the party of free goodies for the middle class, paid for with borrowed money. I don’t hear them talking a whole lot about inner city poor these days, but they sure made a hero out of Sandra Fluke, that 30-something, Ivy-league educated attorney and her ‘right’ to free birth control pills.
What Enron was doing was illegal, which is why people went to jail. They weren’t operating legally in a deregulated market - they were breaking the law. The SEC, which was supposed to be policing Enron, and which I believe even had an office in Enron’s building, was asleep at the switch. Enron’s illegal scam was discovered by an investigative journalist from Fortune magazine, and was first publicized in March of 2001. By April, a number of Wall Street analysts were investigating the firm. By May, the stock price of Enron was collapsing and already down 30%. By August, Jeffrey Skilling had been forced to resign under pressure from the market.
Furthermore, by this time other companies with large financial arms were feeling market pressure to open their books and reassure investors that they weren’t like Enron.
By October, Enron’s share price was down to about 1/5 of its high, investors were fleeing, and the shady nature of Enron was becoming widely known.
By this point, the SEC had done NOTHING. It fell down on the job. All of these shenanigans by the company were done right under its nose, and they were big enough that a lone reporter from Fortune had sniffed them out months earlier. The SEC didn’t even begin investigating Enron until October of that year, after everyone else already knew what had happened and the company was about to go bankrupt.
So tell me again about how it was all the fault of deregulation, when the SEC couldn’t even track gross violations of the regulations that already existed?
After Enron, the government passed Sarbanes-Oxley, which is one of the most expensive pieces of regulation ever passed, with estimates of its initial cost as high as 1.4 trillion dollars. It was a boon to the financial and accounting industry, though, as the demand for their services skyrocketed. Not surprisingly, these were the types of companies that pushed hardest for its passing. More crony capitalism paid for by real capitalists.
The SEC and other government regulators are a joke. There’s a revolving door between the SEC and Wall Street/other regulated entities. No SEC employee is going to try and actually regulate becase a. it never achieves anything, not one person has yet been locked up over the 2008 meltdown and b. they don’t want to jeopardise their chances of a much higher paid job on Wall Street a few years down the line.
http://www.reuters.com/article/2011/05/13/us-usa-sec-revolvingdoor-idUSTRE74C0MI20110513
But this is just your usual tactic as you try and defend your failed ideology. You criticise the government – which has been bought off by crony capitalism – for failing to regulate, blame the regulators for the mess instead of blaming absence of regulation.
If you don’t effectively regulate firms then you get things like Enron and AIG and Countrywide and every other firm involved in the 2008 economic meltdown. That regulation is necessasry is a fact obvious to everybody but the most ideologically compromised. Even Mitt Romney agrees that Wall Street and various economic sectors/corporations need to be regulated! The only question is how you get to effective regulation, not whether you need it or not.
And an accounting law cost $1.4 trillion? Where did you get this “estimate” from? The same people who blamed Jimmy Carter for the 2008 meltdown?
Ok, here is the deal. Leave the market to its own devices, more or less, and you get these periodic eruptions of fraud, which adversely impact a bunch of people both in finance and in, say, Roseau Minnesota. Or you implement SOX to try to rein in the illegal activity. One will cost you a trillion or two when the house of cards falls, the other will cost you a trillion or two over time to stop the house of cards from being built in the first place. Either way, there will be money wasted, like smoke rising from a campfire, is market freedom so very precious that it should be held forth in light of the fact that scammers will play it for all they can? Or could it be that the design of the financial system has made the economy top-heavy and maybe we should try to fix that instead?
Maybe a little bit of regulation would stop stuff like this from happening:
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For years, we've thought that Goldman Sachs was the only Wall Street bank whose employees made horrible jokes among themselves about the mortgage-backed securities they sold — the toxic CDOs they privately referred to as "[shitty deals](http://www.youtube.com/watch?v=1PxGkJoVsuE)" and "[monstrosities"](http://nymag.com/daily/intelligencer/2010/04/email_from_goldmans_fabulous_f.html) before pushing them out the door to investors.
But Morgan Stanley has gotten into the closed-door-mockery game several years late, with some recently unearthed e-mails from a lawsuit brought against the firm by a Taiwanese bank in which Morgan Stanley employees are shown e-mailing each other in March of 2007 about possible names for a collateralized debt obligation they were preparing to sell. The names being tossed around included “Subprime Meltdown,” “Nuclear Holocaust,” “Mike Tyson’s Punchout,” and “Shitbag.”
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Clearly this is all Jimmy Carter’s fault.
The SEC, the cutting edge of financial services regulation. The sword and the shield protecting investors and consumers against crooked bankers :
You see Sam, this is the kind of logic you are supposedly debating against.
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Regulators are a joke.
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But you’re blaming the regulators
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You should blame the absence of regulation
Does that make any sense to you? Me neither. It’s some kind of debating Mobius strip. I can’t even understand what people like this are trying to say.
If I were you, I’d crack open a beer and watch a game on TV instead of trying to ‘debate’ against Jabberwock nonsense. It would be a better use of your time.
Let me get this straight; your position is that there were regulations, but the enforcement of the regulators was a joke. And Sam is wrong in stating that there were regulations, but the enforcement of the regulators was a joke?
So the same claim is right when you say it, but wrong when he says it?
We’re both criticising the government and the regulators. One of us wants actual effective regulation, for regulations to be enforced. One of us thinks that regulation is unecessary and that business can self-regulate.
I thought you’d put me on ignore? Now that you’re not ignoring me how about replying to me?
Thank you.