The Anti-Regulators are the Job Killers

[ILoveRegulation]

Some more things I’d change:

No more off-balance-sheet entities

No more patents on genetically-modified seeds or food (or the genes that go into them)

Nationalize the oil companies so that the U.S. government is in complete control of all oil drilling on- or off-shore. It was BP and Haliburton pushing for that extra, marginal profit that led to the disaster in the gulf.

[Allan from Fallbrook]

Regulation: First off, thanks for the thoughtful response.

Second, I agree with a lot of what you say, but not all. For instance, while I don’t have a problem with tax rates reverting to Clinton-era levels, I’d also caution about using the phrase “tremendous prosperity”. Much of that prosperity was illusory and driven by the dot.bomb economy. This is not said to excuse Dubya’s excesses, which is another story entirely, but to take some dew of that particular lily.

Reinstating Glass-Steagal is an excellent idea. The story behind its removal reads like a Who’s Who of our present woes and the actors/players behind them.

I don’t think of us as a corporatist state, but one where there is excessive crony capitalism (as other posters astutely pointed out) and one where the regulations are either loosely enforced, selectively enforced, or not enforced at all.

Both GOP and Dems have been slopping at the trough for too many years now, and too many people at the “tippy top” are owed too many favors as a result.

I don’t agree that the Fed should be audited quarterly, and its already audited yearly. As a former accountant, I can tell you that having a quarterly audit schedule would completely disrupt operations and make document handling and administration unduly burdensome. I do think there should be more transparency within Fed operations, but you need to remember it isn’t a government operation.

Definitely do away with Fannie and Freddie, or change their charter and eliminate the implied “full faith and credit” aspect of the GSE relationship.

As to educating high schoolers on rent versus buy, I’d also recommend a complete semester on fiscal prudence, including how credit cards work (including interest and carrying charges), how to balance a checkbook, and how to buy or lease a car (including cost of funds and lease versus buy options). Most of the problems that adults get into in these areas is largely a result of ignorance as to how things work, financially-speaking. Its like why you don’t buy your groceries at a convenience store. If you don’t understand why you shouldn’t, you’re probably already in deep shit.

[Allan from Fallbrook]

Regulation: First off, thanks for the thoughtful response.

Second, I agree with a lot of what you say, but not all. For instance, while I don’t have a problem with tax rates reverting to Clinton-era levels, I’d also caution about using the phrase “tremendous prosperity”. Much of that prosperity was illusory and driven by the dot.bomb economy. This is not said to excuse Dubya’s excesses, which is another story entirely, but to take some dew of that particular lily.

Reinstating Glass-Steagal is an excellent idea. The story behind its removal reads like a Who’s Who of our present woes and the actors/players behind them.

I don’t think of us as a corporatist state, but one where there is excessive crony capitalism (as other posters astutely pointed out) and one where the regulations are either loosely enforced, selectively enforced, or not enforced at all.

Both GOP and Dems have been slopping at the trough for too many years now, and too many people at the “tippy top” are owed too many favors as a result.

I don’t agree that the Fed should be audited quarterly, and its already audited yearly. As a former accountant, I can tell you that having a quarterly audit schedule would completely disrupt operations and make document handling and administration unduly burdensome. I do think there should be more transparency within Fed operations, but you need to remember it isn’t a government operation.

Definitely do away with Fannie and Freddie, or change their charter and eliminate the implied “full faith and credit” aspect of the GSE relationship.

As to educating high schoolers on rent versus buy, I’d also recommend a complete semester on fiscal prudence, including how credit cards work (including interest and carrying charges), how to balance a checkbook, and how to buy or lease a car (including cost of funds and lease versus buy options). Most of the problems that adults get into in these areas is largely a result of ignorance as to how things work, financially-speaking. Its like why you don’t buy your groceries at a convenience store. If you don’t understand why you shouldn’t, you’re probably already in deep shit.

[Allan from Fallbrook]

Regulation: First off, thanks for the thoughtful response.

Second, I agree with a lot of what you say, but not all. For instance, while I don’t have a problem with tax rates reverting to Clinton-era levels, I’d also caution about using the phrase “tremendous prosperity”. Much of that prosperity was illusory and driven by the dot.bomb economy. This is not said to excuse Dubya’s excesses, which is another story entirely, but to take some dew of that particular lily.

Reinstating Glass-Steagal is an excellent idea. The story behind its removal reads like a Who’s Who of our present woes and the actors/players behind them.

I don’t think of us as a corporatist state, but one where there is excessive crony capitalism (as other posters astutely pointed out) and one where the regulations are either loosely enforced, selectively enforced, or not enforced at all.

Both GOP and Dems have been slopping at the trough for too many years now, and too many people at the “tippy top” are owed too many favors as a result.

I don’t agree that the Fed should be audited quarterly, and its already audited yearly. As a former accountant, I can tell you that having a quarterly audit schedule would completely disrupt operations and make document handling and administration unduly burdensome. I do think there should be more transparency within Fed operations, but you need to remember it isn’t a government operation.

Definitely do away with Fannie and Freddie, or change their charter and eliminate the implied “full faith and credit” aspect of the GSE relationship.

As to educating high schoolers on rent versus buy, I’d also recommend a complete semester on fiscal prudence, including how credit cards work (including interest and carrying charges), how to balance a checkbook, and how to buy or lease a car (including cost of funds and lease versus buy options). Most of the problems that adults get into in these areas is largely a result of ignorance as to how things work, financially-speaking. Its like why you don’t buy your groceries at a convenience store. If you don’t understand why you shouldn’t, you’re probably already in deep shit.

[Allan from Fallbrook]

Regulation: First off, thanks for the thoughtful response.

Second, I agree with a lot of what you say, but not all. For instance, while I don’t have a problem with tax rates reverting to Clinton-era levels, I’d also caution about using the phrase “tremendous prosperity”. Much of that prosperity was illusory and driven by the dot.bomb economy. This is not said to excuse Dubya’s excesses, which is another story entirely, but to take some dew of that particular lily.

Reinstating Glass-Steagal is an excellent idea. The story behind its removal reads like a Who’s Who of our present woes and the actors/players behind them.

I don’t think of us as a corporatist state, but one where there is excessive crony capitalism (as other posters astutely pointed out) and one where the regulations are either loosely enforced, selectively enforced, or not enforced at all.

Both GOP and Dems have been slopping at the trough for too many years now, and too many people at the “tippy top” are owed too many favors as a result.

I don’t agree that the Fed should be audited quarterly, and its already audited yearly. As a former accountant, I can tell you that having a quarterly audit schedule would completely disrupt operations and make document handling and administration unduly burdensome. I do think there should be more transparency within Fed operations, but you need to remember it isn’t a government operation.

Definitely do away with Fannie and Freddie, or change their charter and eliminate the implied “full faith and credit” aspect of the GSE relationship.

As to educating high schoolers on rent versus buy, I’d also recommend a complete semester on fiscal prudence, including how credit cards work (including interest and carrying charges), how to balance a checkbook, and how to buy or lease a car (including cost of funds and lease versus buy options). Most of the problems that adults get into in these areas is largely a result of ignorance as to how things work, financially-speaking. Its like why you don’t buy your groceries at a convenience store. If you don’t understand why you shouldn’t, you’re probably already in deep shit.

[Allan from Fallbrook]

Regulation: First off, thanks for the thoughtful response.

Second, I agree with a lot of what you say, but not all. For instance, while I don’t have a problem with tax rates reverting to Clinton-era levels, I’d also caution about using the phrase “tremendous prosperity”. Much of that prosperity was illusory and driven by the dot.bomb economy. This is not said to excuse Dubya’s excesses, which is another story entirely, but to take some dew of that particular lily.

Reinstating Glass-Steagal is an excellent idea. The story behind its removal reads like a Who’s Who of our present woes and the actors/players behind them.

I don’t think of us as a corporatist state, but one where there is excessive crony capitalism (as other posters astutely pointed out) and one where the regulations are either loosely enforced, selectively enforced, or not enforced at all.

Both GOP and Dems have been slopping at the trough for too many years now, and too many people at the “tippy top” are owed too many favors as a result.

I don’t agree that the Fed should be audited quarterly, and its already audited yearly. As a former accountant, I can tell you that having a quarterly audit schedule would completely disrupt operations and make document handling and administration unduly burdensome. I do think there should be more transparency within Fed operations, but you need to remember it isn’t a government operation.

Definitely do away with Fannie and Freddie, or change their charter and eliminate the implied “full faith and credit” aspect of the GSE relationship.

As to educating high schoolers on rent versus buy, I’d also recommend a complete semester on fiscal prudence, including how credit cards work (including interest and carrying charges), how to balance a checkbook, and how to buy or lease a car (including cost of funds and lease versus buy options). Most of the problems that adults get into in these areas is largely a result of ignorance as to how things work, financially-speaking. Its like why you don’t buy your groceries at a convenience store. If you don’t understand why you shouldn’t, you’re probably already in deep shit.

[CA renter]

[quote=pri_dk][quote]BTW, there is no way someone can make the argument that we only reward those who most effectively allocate capital.[/quote]

http://www.forbes.com/lists/2008/54/400list08_The-400-Richest-Americans_Rank.html

Note that:

– There are not many bankers on the list.

– Many of them are first-generation wealth.

I share your general concerns that, for many years now, there has been a significant shift in wealth distribution toward the top. And much of that is for the “wrong” reasons. The playing field is becoming less level and that is bad for everyone in the long run.

But I disagree with your general conclusions about the effectiveness of capitalism. It does work quite well, when it’s done right.[/quote]

Just a cursory look at the top 20 shows quite a few are heirs to fortunes, not self-made…and I don’t have a problem with that. I do not favor estate taxes (perhaps over $5MM, and very progressive), but think we ought to focus on raising capital gains taxes (and taxes on other investment income), as this is how wealth is concentrated.

Contrary to popular opinion, inheritance does NOT concentrate wealth, as most inheritance goes from one person to a number of people/heirs. Inheritance dilutes wealth in most cases. However, when you have large amounts of weatlh earning dividends, interest, and cap gains **and you tax it at a LOWER rate than productive labor** THEN you have a further concentration of wealth that is not “earned.”

We have to decide if we want to continue rewarding gambling and speculation over productive labor. As it stands, our tax structure (not to mention our short-sighted trade policies) is pushing everyone into “investing,” rather than working. This is not sustainable over the long run.

I don’t have too much of a problem with capitalism, if only we could find an actual example in the real world that is devoid of corruption and monopolies that eventually lead to the implosion of an economy, with the poor being made to suffer for the benefit of the wealthy. This is where we stand today, unfortunately.

[CA renter]

[quote=pri_dk][quote]BTW, there is no way someone can make the argument that we only reward those who most effectively allocate capital.[/quote]

http://www.forbes.com/lists/2008/54/400list08_The-400-Richest-Americans_Rank.html

Note that:

– There are not many bankers on the list.

– Many of them are first-generation wealth.

I share your general concerns that, for many years now, there has been a significant shift in wealth distribution toward the top. And much of that is for the “wrong” reasons. The playing field is becoming less level and that is bad for everyone in the long run.

But I disagree with your general conclusions about the effectiveness of capitalism. It does work quite well, when it’s done right.[/quote]

Just a cursory look at the top 20 shows quite a few are heirs to fortunes, not self-made…and I don’t have a problem with that. I do not favor estate taxes (perhaps over $5MM, and very progressive), but think we ought to focus on raising capital gains taxes (and taxes on other investment income), as this is how wealth is concentrated.

Contrary to popular opinion, inheritance does NOT concentrate wealth, as most inheritance goes from one person to a number of people/heirs. Inheritance dilutes wealth in most cases. However, when you have large amounts of weatlh earning dividends, interest, and cap gains **and you tax it at a LOWER rate than productive labor** THEN you have a further concentration of wealth that is not “earned.”

We have to decide if we want to continue rewarding gambling and speculation over productive labor. As it stands, our tax structure (not to mention our short-sighted trade policies) is pushing everyone into “investing,” rather than working. This is not sustainable over the long run.

I don’t have too much of a problem with capitalism, if only we could find an actual example in the real world that is devoid of corruption and monopolies that eventually lead to the implosion of an economy, with the poor being made to suffer for the benefit of the wealthy. This is where we stand today, unfortunately.

[CA renter]

[quote=pri_dk][quote]BTW, there is no way someone can make the argument that we only reward those who most effectively allocate capital.[/quote]

http://www.forbes.com/lists/2008/54/400list08_The-400-Richest-Americans_Rank.html

Note that:

– There are not many bankers on the list.

– Many of them are first-generation wealth.

I share your general concerns that, for many years now, there has been a significant shift in wealth distribution toward the top. And much of that is for the “wrong” reasons. The playing field is becoming less level and that is bad for everyone in the long run.

But I disagree with your general conclusions about the effectiveness of capitalism. It does work quite well, when it’s done right.[/quote]

Just a cursory look at the top 20 shows quite a few are heirs to fortunes, not self-made…and I don’t have a problem with that. I do not favor estate taxes (perhaps over $5MM, and very progressive), but think we ought to focus on raising capital gains taxes (and taxes on other investment income), as this is how wealth is concentrated.

Contrary to popular opinion, inheritance does NOT concentrate wealth, as most inheritance goes from one person to a number of people/heirs. Inheritance dilutes wealth in most cases. However, when you have large amounts of weatlh earning dividends, interest, and cap gains **and you tax it at a LOWER rate than productive labor** THEN you have a further concentration of wealth that is not “earned.”

We have to decide if we want to continue rewarding gambling and speculation over productive labor. As it stands, our tax structure (not to mention our short-sighted trade policies) is pushing everyone into “investing,” rather than working. This is not sustainable over the long run.

I don’t have too much of a problem with capitalism, if only we could find an actual example in the real world that is devoid of corruption and monopolies that eventually lead to the implosion of an economy, with the poor being made to suffer for the benefit of the wealthy. This is where we stand today, unfortunately.

[CA renter]

[quote=pri_dk][quote]BTW, there is no way someone can make the argument that we only reward those who most effectively allocate capital.[/quote]

http://www.forbes.com/lists/2008/54/400list08_The-400-Richest-Americans_Rank.html

Note that:

– There are not many bankers on the list.

– Many of them are first-generation wealth.

I share your general concerns that, for many years now, there has been a significant shift in wealth distribution toward the top. And much of that is for the “wrong” reasons. The playing field is becoming less level and that is bad for everyone in the long run.

But I disagree with your general conclusions about the effectiveness of capitalism. It does work quite well, when it’s done right.[/quote]

Just a cursory look at the top 20 shows quite a few are heirs to fortunes, not self-made…and I don’t have a problem with that. I do not favor estate taxes (perhaps over $5MM, and very progressive), but think we ought to focus on raising capital gains taxes (and taxes on other investment income), as this is how wealth is concentrated.

Contrary to popular opinion, inheritance does NOT concentrate wealth, as most inheritance goes from one person to a number of people/heirs. Inheritance dilutes wealth in most cases. However, when you have large amounts of weatlh earning dividends, interest, and cap gains **and you tax it at a LOWER rate than productive labor** THEN you have a further concentration of wealth that is not “earned.”

We have to decide if we want to continue rewarding gambling and speculation over productive labor. As it stands, our tax structure (not to mention our short-sighted trade policies) is pushing everyone into “investing,” rather than working. This is not sustainable over the long run.

I don’t have too much of a problem with capitalism, if only we could find an actual example in the real world that is devoid of corruption and monopolies that eventually lead to the implosion of an economy, with the poor being made to suffer for the benefit of the wealthy. This is where we stand today, unfortunately.

[CA renter]

[quote=pri_dk][quote]BTW, there is no way someone can make the argument that we only reward those who most effectively allocate capital.[/quote]

http://www.forbes.com/lists/2008/54/400list08_The-400-Richest-Americans_Rank.html

Note that:

– There are not many bankers on the list.

– Many of them are first-generation wealth.

I share your general concerns that, for many years now, there has been a significant shift in wealth distribution toward the top. And much of that is for the “wrong” reasons. The playing field is becoming less level and that is bad for everyone in the long run.

But I disagree with your general conclusions about the effectiveness of capitalism. It does work quite well, when it’s done right.[/quote]

Just a cursory look at the top 20 shows quite a few are heirs to fortunes, not self-made…and I don’t have a problem with that. I do not favor estate taxes (perhaps over $5MM, and very progressive), but think we ought to focus on raising capital gains taxes (and taxes on other investment income), as this is how wealth is concentrated.

Contrary to popular opinion, inheritance does NOT concentrate wealth, as most inheritance goes from one person to a number of people/heirs. Inheritance dilutes wealth in most cases. However, when you have large amounts of weatlh earning dividends, interest, and cap gains **and you tax it at a LOWER rate than productive labor** THEN you have a further concentration of wealth that is not “earned.”

We have to decide if we want to continue rewarding gambling and speculation over productive labor. As it stands, our tax structure (not to mention our short-sighted trade policies) is pushing everyone into “investing,” rather than working. This is not sustainable over the long run.

I don’t have too much of a problem with capitalism, if only we could find an actual example in the real world that is devoid of corruption and monopolies that eventually lead to the implosion of an economy, with the poor being made to suffer for the benefit of the wealthy. This is where we stand today, unfortunately.

[jstoesz]

I just wanted to make one other point on this front. Most monopolies/oligopolies are government made by mandate or regulation. Rarely does a company rise to the top and stand there for long periods without some useful legislation.

I think most regulation, especially the really complicated stuff is bound to bite us in the ass, and fortify the big banks against challengers. we are better off just breaking up the systemic risks. We have had a few hundred community bank failures in the last couple years, how come no one fears these failures?

One of the only regulations I can really agree to is a (low) hard limit on total debt a bank may hold.

Maybe I am just being simplistic, and I probably am, because not once have a heard a serious call for limiting the total size of banks.

[jstoesz]

I just wanted to make one other point on this front. Most monopolies/oligopolies are government made by mandate or regulation. Rarely does a company rise to the top and stand there for long periods without some useful legislation.

I think most regulation, especially the really complicated stuff is bound to bite us in the ass, and fortify the big banks against challengers. we are better off just breaking up the systemic risks. We have had a few hundred community bank failures in the last couple years, how come no one fears these failures?

One of the only regulations I can really agree to is a (low) hard limit on total debt a bank may hold.

Maybe I am just being simplistic, and I probably am, because not once have a heard a serious call for limiting the total size of banks.

[jstoesz]

I just wanted to make one other point on this front. Most monopolies/oligopolies are government made by mandate or regulation. Rarely does a company rise to the top and stand there for long periods without some useful legislation.

I think most regulation, especially the really complicated stuff is bound to bite us in the ass, and fortify the big banks against challengers. we are better off just breaking up the systemic risks. We have had a few hundred community bank failures in the last couple years, how come no one fears these failures?

One of the only regulations I can really agree to is a (low) hard limit on total debt a bank may hold.

Maybe I am just being simplistic, and I probably am, because not once have a heard a serious call for limiting the total size of banks.

[jstoesz]

I just wanted to make one other point on this front. Most monopolies/oligopolies are government made by mandate or regulation. Rarely does a company rise to the top and stand there for long periods without some useful legislation.

I think most regulation, especially the really complicated stuff is bound to bite us in the ass, and fortify the big banks against challengers. we are better off just breaking up the systemic risks. We have had a few hundred community bank failures in the last couple years, how come no one fears these failures?

One of the only regulations I can really agree to is a (low) hard limit on total debt a bank may hold.

Maybe I am just being simplistic, and I probably am, because not once have a heard a serious call for limiting the total size of banks.

[Author]

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