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Depends on circumstance. Deregulation of the financial sector in 1999-2000 (Commodities Futures Modernization Act and Financial Services Modernization Act and Death of Glass Steagall) DEFINITELY had a huge role in the 2008 melt down, and to this day, are a big reason why commodities markets (especially for things like oil and food) are highly volatile and why prices for commodities hardly reflect the laws of supply and demand.
The right is full of BS when they say they want "deregulation". What they really want are rules and regulations to benefit major corporations and banks. Government must be involved, always. Framing the issue of regulation in terms of "less" vs. "more" and "left" vs. "right" is idiotic. When it comes to regulation, what we're really talking about is who benefits the most. The banking industry in this country shielded from runs on them because of the FDIC (how many would argue that this is bad?). However, once the government steps in to insure banks against losses like this, it gives banks an insurance policy against failure and gives them motivation to pursue high risk lending. This is it is absolutely critical for government to step in a regulate the banking industry. What would you rather have? An economy built in the stone age where we'd have almost no credible monetary system, or a banking industry that is more stable, but along with it must come more regulation. Sorry, you can't have it both ways.
Heritage is a propaganda organization for the GOP, and I'm not sure what you're referring to regarding "Fraser." I'd have to see their analyses.
So you are saying they are trying to rank US low. If that is the case, why don't rank them lower?
Fraser is Canadian, do they work for the GOP as well? What their political views are, or what statements they make are irrelevant. What matters is their ranking. Both Fraser and Heritage has a good economic freedom ranking.
Both of them show that US do have a lot of regulation.
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In English, please?
Stop being insulting. What I wrote was easy to understand.
What I am talking about is politics. Being involved in politics in the US today is very difficult. It requires a lot of work, and become very exclusive. This is all done to keep big money out of politics.
However, in practice politicians are able to accept any donations. It makes no sense.
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Legislators or regulators? Regulators don't write laws.
I was talking about politicians. They are the ones who pass the laws. If americas problem was too little regulation, then why do US have 200,000 pages already. How much is enough. Do you think 2,000,000 pages will improve the situation?
Too much regulations makes the law system a mess, and hurts the average man who can not defend himself.
Let's take the ICE for example (where oil is traded) and is currently completely out of US jurisdiction for regulation. This is what you get when you have a completely unregulated market with no government oversight:
Goldman Sachs (GS), Morgan Stanley (MS), BP (BP), Total (TOT), Shell (RDS.A), Deutsche Bank (DB) and Societe Generale (SCGLY.PK) founded the Intercontinental Exchange (ICE) in 2000. ICE is an online commodities and futures marketplace. It is outside the US and operates free from the constraints of US laws. The exchange was set up to facilitate "dark pool" trading in the commodities markets. Billions of dollars are being placed on oil futures contracts at the ICE and the beauty of this scam is that they NEVER take delivery, per se. They just ratchet up the price with leveraged speculation using your TARP money. This year alone they ratcheted up the global cost of oil from $40 to $80 per barrel.
A Congressional investigation into energy trading in 2003 discovered that ICE was being used to facilitate "round-trip" trades. Round-trip trades occur when one firm sells energy to another, and then the second firm simultaneously sells the same amount of energy back to the first company at exactly the same price. No commodity ever changes hands. But when done on an exchange, these transactions send a price signal to the market and they artificially boost revenue for the company. This is nothing more than a massive fraud, pure and simple.
"Traders of the the ICE core membership (GS, MS, BP, DB, RDS.A, GLE & TOT) wouldn’t really have to put much money at risk by their standards in order to move or support the global market price via the BFOE market. Indeed the evolution of the Brent market has been a response to declining production and the fact that traders could not resist manipulating the market by buying up contracts and “squeezing” those who had sold oil they did not have. The fewer cargoes produced, the easier the underlying market is to manipulate." - Chris Cook, Former Director of the International Petroleum Exchange, which was bought by ICE.
How widespread are round-trip trades? The Congressional Research Service looked at trading patterns in the energy sector and this is what they reported:
This pattern of trading suggests a market environment in which a significant volume of fictitious trading could have taken place. Yet since most of the trading is unregulated by the government, we have only a slim idea of the illusion being perpetrated in the energy sector.
DMS Energy, when investigated by Congress, admitted that 80 percent of its trades in 2001 were round-trip trades. That means 80 percent of all of their trades that year were bogus trades where no commodity changed hands, and yet the balance sheets reflect added revenue. Remember, these trades are sham deals where nothing was exchanged. Duke Energy (DUK) disclosed that $1.1 billion worth of trades were round-trip since 1999. Roughly two-thirds of these were done on the InterContinental Exchange; that is, the online, nonregulated, nonaudited, nonoversight for manipulation and fraud entity run by banks in this country. That means thousands of subscribers would see false pricing. Under investigation, a lawyer for JPMorgan Chase (JPM) admitted the bank engineered a series of “round-trip” trades with Enron.
No, I'm saying that they will only publish studies that support their political agenda, and their political agenda is set by the GOP leaders.
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Fraser is Canadian, do they work for the GOP as well?
Possibly. Regardless, you never provided the study.
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What their political views are, or what statements they make are irrelevant. What matters is their ranking.
Their ranking is influenced by their agenda. So yeah, their political views are definitely relevant.
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Both Fraser and Heritage has a good economic freedom ranking.
I reject that assumption.
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Stop being insulting. What I wrote was easy to understand.
you said: Why is to so extremely difficult being involved in politics
What the hell does that mean?
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What I am talking about is politics. Being involved in politics in the US today is very difficult. It requires a lot of work, and become very exclusive. This is all done to keep big money out of politics.
Huh?
The exclusitivity is there to keep big money IN politics, and common people OUT of politics.
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I was talking about politicians. They are the ones who pass the laws.
Well you responded to my statement about regulators. If your question was about legislators then you didn't understand my statement.
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If americas problem was too little regulation, then why do US have 200,000 pages already.
If you want to discuss social regulations in the USA, sure, I would be on your side. But let us not mix federal regulations with lemonade stands. Having said that, if you've lived in three of them (and so have I... but Germany and England) you should know better. But, we can talk endlessly and get nowhere. How about an example of a study in regulatory differences? This is a case of comparing oil drilling regulations in the USA compared to Norway. First, the link here.
Now, stop counting pages, and start understanding the differences outlined. The key is not non-existent regulations in Norway. In fact, they seem to have better defined approach to regulating.
Listen, I don't know how many times I have to say it, but I am not against sensible regulation. The reason there are few regulations in the oil industry in the US, is because oil companies lobby the government, while Norway focus more on the security of the workers.
I know better, that is why I am saying against stereotypes, that there are less regulations in Scandinavia for the average person. You don't need an accountant to pay taxes in Norway. You don't have to be afraid of getting sued. There are less paperwork. There are still too many regulations, but it is better than America.
Here is an article that talks about Dodd Frank bill and why it won't help. Problem with american regulators is that they try to regulate everything. A monster like Dodd Frank can easily be misused.
America doesn't need no regulation, or weaker regulation. What America needs are simple, effective, sensible regulation. Something is wrong when the politicians doesn't even understand their own laws.
Listen, I don't know how many times I have to say it, but I am not against sensible regulation. The reason there are few regulations in the oil industry in the US, is because oil companies lobby the government, while Norway focus more on the security of the workers.
I know better, that is why I am saying against stereotypes, that there are less regulations in Scandinavia for the average person. You don't need an accountant to pay taxes in Norway. You don't have to be afraid of getting sued. There are less paperwork. There are still too many regulations, but it is better than America.
As I said, the American Right Wing is about... deregulate corporations, regulate people. In those Scandinavian countries, such ideologies are either neutered or beaten down. Trust me, the USA will adapt eventually.
Clearly, you agree that regulations aren't a problem, but corporate influence in regulations and their enforcement is.
Fannie and Freddie played a minor role in the "cratering" of the housing market. The surge of problem loans were nonconforming.
Now, today, post-crash -- Fannie and Freddie serve as the emergency support system for housing market transactions. (and therefore prices). I wouldn't call that "salvation", like you did.
If you want to talk total reform of the financial system, that's one thing -- but just eliminating Fannie and Freddie (without reforming central bank policy and tax policy) is sheer stupidity.
The stupidity was politicizing the mortgage lending business to ensure that a certain constituency would be given loans irrespective of their ability to repay those loans and then mandating that Fannie and Freddie buy up a certain percentage of those loans as an incentize to banks who balked at unsound lending practices. Banks, having thus been freed of the consequences of making unsound loans, doubled down on such loans and passed the risk on to Freddie and Fannie (in effect, the taxpayer) with the result that the taxpayer has already shelled out over $180 billion to make good on these bad loans. So we don't need a total reform of the financial system. All we need to do is get the politicians out of it.
The stupidity was politicizing the mortgage lending business to ensure that a certain constituency would be given loans irrespective of their ability to repay those loans
What "certain constituency" ? Fannie and Freddie bought run of the mill, middle class, 30-year loans.
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and then mandating that Fannie and Freddie buy up a certain percentage of those loans as an incentize to banks who balked at unsound lending practices. Banks, having thus been freed of the consequences of making unsound loans, doubled down on such loans and passed the risk on to Freddie and Fannie (in effect, the taxpayer) with the result that the taxpayer has already shelled out over $180 billion to make good on these bad loans.
Yes, but this practice went on for decades without any serious problems. It's bad, but it's not the proximate cause of the financial crisis. Things didn't go bad over $180 billion.
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So we don't need a total reform of the financial system.
Yes, we do. You didn't address any of the laws and practices we have that enable these financial firms to create asset bubbles. Fannie and Freddie absorb risk for the banks, and they provide liquidity, but they don't drive monetary policy.
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