[luchabee]

You seem to be contradicting the point of the doctor and making my point. It was actually government intervention by artificially depressing interest rates that has led to this min-disaster!

Also, people, naturally, sought to take advantage of this government intervention made millions. Even the relatively uneducated in real estate made hundreds of thousands of dollars per year. This was not a bad result. Will people late to the party get hurt? Yes. Will people who have no understanding of basic finance get hurt and who took out loans that were too big? Yes (not really that much, though, cause they will get free rent after the NODs. The people who actually will get hurt the most will be affluent investors who made the loans posssible.

Would this have been avoided by making loan applicants read scores of pages of disclosures about not taking out too big a loan? No. They didn’t even read the fine print to begin with, so why would they read additional disclosures?

Maybe, after artificially depressing interest rates, the government should have limited loan sizes? Why not do this in the stock market, too, when artificially low interest rates cause the market to heat up?

So, thank you for agreeing with me. Also, I’ll pass on smelling the coffee. I prefer tea.

[luchabee]

What else would you regulate? How about credit cards? Maybe car loans? How about people buying cell phone plans that are too expensive?

How many government workers should we hire to enforce these laws. A lot, you say? (Then it is expensive and we will pay more taxes.) Not a lot? (Then an ineffective measure and another pointless government agency.) You would say “enough” to enforce the regulation. We have heard that before with government agencies.

Should we have regulated the stock market, too, before the dot.com crash? Maybe limit an individual’s exposure to the market? Have them “read” pages and pages of disclosures before investing (in securities or homes)?

You are pretty old school, Doctor. Maybe, it is time to update your education?

[luchabee]

What else would you regulate? How about credit cards? Maybe car loans? How about people buying cell phone plans that are too expensive?

How many government workers should we hire to enforce these laws. A lot, you say? (Then it is expensive and we will pay more taxes.) Not a lot? (Then an ineffective measure and another pointless government agency.) You would say “enough” to enforce the regulation. We have heard that before with government agencies.

Should we have regulated the stock market, too, before the dot.com crash? Maybe limit an individual’s exposure to the market? Have them “read” pages and pages of disclosures before investing (in securities or homes)?

You are pretty old school, Doctor. Maybe, it is time to update your education?

[luchabee]

Oh, please.

These problems typcially occur when there are hybrid markets with both partial deregulation and regulation, e.g., California’s energy prices where state energy companies couldn’t increase prices but the energy costs to supply consumers were steadily increasing. Therefore, PG&E went belly up.

This new regulation frenzy is the same type of thinking that has created the Sarbanes/Oxley monster. What did we get? Companies staying private and not going public and billions (if not trillions) of lost dollars and hundreds of companies no longer going public in the U.S. and instead turning to Asia to do their I.P.O.s

Yes, I feel very sorry for the people that were hurt with these scandals (and agree with government assistance, to some degree), but this is why proper asset allocation is needed and not having your entire portfolio in Enron stock when you are 62.

Are there problems with deregulated markets? Sure, it is called human greed and the business cycle. (Some people call this “life.” Perhaps you have heard about it?) Are there blow-ups like the S & L debacle and Enron? Yes. Are the costs passed on to the taxpayers? Sometimes. (On the other hand, what about labor’s demands in the auto market that may result in much of this industry going overseas in the next 2o years? Isn’t that a crime against the younger generations who will no longer have jobs because of excessive demands by Baby Boomers in unions? So, maybe, we should regulate unions more?)

So, one must ask is it worth it and efficient to create billions and billions of dollars in government regulation and thousands of more governement workers to attempt to enforce something that happens on occasion and can be addressed when it does with government assistance?

Moreover, is this wise with globalization? We might protect ourselves from some disaster down the road, but be a bloated, regulated economy unable to compete with India or China, leaving only government workers with quality jobs.

Additionally, your cure seems to be government regulation and you talk about the promise of government intrusion into the market. With that said, the S&L crisis will be nothing compared to the likely collapse of government programs like Social Security and Medicare in the next 10 to 20 years.

Yet, you want to add more government workers and inefficient layers of government to regulate the private sector which is far better run than the US government?

Also, talk about passing on expenses to taxpayers? How about the trillions of dollars that will have to be paid by younger taxpayers like myself or the rampant inflation that will result when the government attempts to spend itself out of trouble. (Granted, this problem might be partially remedied with millions and millions of young immigrants comming in to support this scheme and fundamentally changing American society as well).

So, I’ll pass on the hyper-regulation card. Despite its occasional mini-disasters, deregulation and competition has been an essential force in improving the American-way-of-life. Sure, have the government use its muscle if need be (with prosecution and civil enforcement), but don’t hamper our economy with needless regulation and causing millions of jobs to melt away to more stream-lined economies in Asia.

[luchabee]

Oh, please.

These problems typcially occur when there are hybrid markets with both partial deregulation and regulation, e.g., California’s energy prices where state energy companies couldn’t increase prices but the energy costs to supply consumers were steadily increasing. Therefore, PG&E went belly up.

This new regulation frenzy is the same type of thinking that has created the Sarbanes/Oxley monster. What did we get? Companies staying private and not going public and billions (if not trillions) of lost dollars and hundreds of companies no longer going public in the U.S. and instead turning to Asia to do their I.P.O.s

Yes, I feel very sorry for the people that were hurt with these scandals (and agree with government assistance, to some degree), but this is why proper asset allocation is needed and not having your entire portfolio in Enron stock when you are 62.

Are there problems with deregulated markets? Sure, it is called human greed and the business cycle. (Some people call this “life.” Perhaps you have heard about it?) Are there blow-ups like the S & L debacle and Enron? Yes. Are the costs passed on to the taxpayers? Sometimes. (On the other hand, what about labor’s demands in the auto market that may result in much of this industry going overseas in the next 2o years? Isn’t that a crime against the younger generations who will no longer have jobs because of excessive demands by Baby Boomers in unions? So, maybe, we should regulate unions more?)

So, one must ask is it worth it and efficient to create billions and billions of dollars in government regulation and thousands of more governement workers to attempt to enforce something that happens on occasion and can be addressed when it does with government assistance?

Moreover, is this wise with globalization? We might protect ourselves from some disaster down the road, but be a bloated, regulated economy unable to compete with India or China, leaving only government workers with quality jobs.

Additionally, your cure seems to be government regulation and you talk about the promise of government intrusion into the market. With that said, the S&L crisis will be nothing compared to the likely collapse of government programs like Social Security and Medicare in the next 10 to 20 years.

Yet, you want to add more government workers and inefficient layers of government to regulate the private sector which is far better run than the US government?

Also, talk about passing on expenses to taxpayers? How about the trillions of dollars that will have to be paid by younger taxpayers like myself or the rampant inflation that will result when the government attempts to spend itself out of trouble. (Granted, this problem might be partially remedied with millions and millions of young immigrants comming in to support this scheme and fundamentally changing American society as well).

So, I’ll pass on the hyper-regulation card. Despite its occasional mini-disasters, deregulation and competition has been an essential force in improving the American-way-of-life. Sure, have the government use its muscle if need be (with prosecution and civil enforcement), but don’t hamper our economy with needless regulation and causing millions of jobs to melt away to more stream-lined economies in Asia.

[Author]

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