We don’t need more regulations
Mar 27th, 2009 by David Anderson
Have you heard the the tall tale told by the left that we have economic issues because of tax cuts and deregulation? People in the know say that this recession was as much caused by wrong headed regulation as anything else. The mark to market rules are exacerbated a normal healthy correction and caused a financial panic. The government pushed banks into interesting mortgage deals which had to be sold to allow for the new risk. They were packaged into new instruments that no one understood, but they were sold by government sponsored enterprises like Freddie Mac which encouraged an uncritical eye. The government has a role in the recovery, but it starts by correcting itself before it corrects everyone else. It certainly doesn’t include making more government run enterprises. We are still paying for the mess made by the last ones. We should review and correct our regulatory regime not reflexively increase regulation.
Scott Powell wrote a great column in spite of the fact it was in the “evil, right-wing” Washington Times. Here is my favorite quote; the rest is linked.
There is blame on both sides of the political aisle for our current economic mess. But the siren call of socializing failing sectors of the economy – whether in banking, housing, health care or in Detroit – leads to a wrong and dangerous course that undermines the renewing and self-correcting nature of market forces.
Good intentions from Washington have too often resulted in harmful unintended consequences. Worse, there often is no corrective to harmful government-engineered outcomes because accountability is obfuscated and vested interests become entrenched, thus perpetuating a new dysfunctional status quo.
The Sarbanes-Oxley Act, a reaction to Enron-style accounting scandals enacted in 2002 on a Senate vote of 99-0, has been one of the most costly and counterproductive regulations imposed on our economy, hindering innovation, slamming the door shut on initial public offerings (IPOs) in the stock market and driving many companies out of U.S. markets and off U.S. tax rolls.
If elected statesmen versus politicians assinie things like sarbox wouldn’t have happened. If only we could have more Greg Lavelle’s in DC.
Who needs IPO’s when you have the federal printing press?
Deregulation is anathema to socialism. Schools, sex, science, history- everything must be politicized. Then, the state must, by necessity, be invoved in virtually every aspect of human endeavor. The heights of success will not be attained by the productive, but by those best equipped to make their way through the political maze; career parasites like Biden will be the ideal.
Of course, like the USSR, the Socialist State will eventually collapse; but, how many generations will be mired in mediocrity? Your guess is as good as mine.
It is fascinating that we had a massive failure of regulation and the solution is more regulation without even reviewing where we went wrong in the first place. We need to reform our regulations not pile new ones on top of the old ones which don’t work. I am not saying that we don’t need new regulations (before someone even gets started) I am saying that we don’t need defacto nationalization powers.