[Finnucane]

Well, no, because the problem is not the regulation, but the lack of enforcement of the regulation. And that happens because the political appointees who runt the agencies are too close to the banks they are supposed to be monitoring. If Wells is making changes to the loans without properly getting the court's approval, that's fraud on the court and clearly illegal. Getting a criminal proceeding against Wells or any of its employees requires the DoJ to agree to take action, which seems highly unlikely.

During the fallout from the housing bubble, it became apparent that many loans had not been properly transferred as they were sold from one investor to the next. The result of this was that many foreclosures were brought with essentially forged papers--servicers worked overtime trying to cover up broken paper trails. The courts in some states, esp. Florida, looked the other way as this bogus paper was passed in front of them.

[scarmig]

In other words, regulation is a great system, except it always gets corrupted by the politics of the regulators?

I'm very supportive of regulating banks, both in theory and in reality. But we can't just wish away corruption and influence. Especially since so much financial activity is highly technical and the only people knowledgeable enough to create and enforce reasonable regulations are the same as the people conducting those activities that need to be regulated in the first place.

I'm not sure of the fix, here.

[Finnucane]

Like anything else, it's a political issue. Meaning: citizens have to give a shit about it, be informed, and be vocal about it with their representatives. Republicans in Congress just voted to roll back Dodd-Frank, and are aiming to get rid of the CFPB. Why? Because the CFPB is actually trying to protect people from shit like this.

[zo1]

Everyone is kicking the blame elsewhere. First, the banks, then lack of regulations, then too-much regulations, then imperfect regulations, then corruptible regulators, then finally the people that don't participate in politics.

The more I follow politics, and the media in general, I am leaning towards describing the entire thing as a giant soap opera where the media only "comments" or "gossips" instead of reporting facts and assigning provable blame. Everyone just passes off blame, no one really can hold anyone else accountable, and the cycle just repeats constantly. This is a fault of the system in that it allows blame to be passed along like that. The problem never really being addressed, just half-assed by each batch of politicians so that they can simultaneously take some blame, take some credit for trying, and also not be held accountable in any way.

[rhizome]

One thing I've learned as I've grown older is that the penalties for these things are absolutely malleable and the law can say "no, there's no passing the buck, the bank is responsible." Or the consumer. Whatever the politics of the day say should happen.

[convolvatron]

ok, so we've abandoned the notion of objective truth and everything is all about the narrative.

the interesting question is whether or not there ever really was a cycle where the citizenry were informed, and could collectively influence policy.

even if we were just being naive, the abandonment of that model doesn't seem to have empowered the populace - seemingly the opposite.

[zo1]

>"ok, so we've abandoned the notion of objective truth and everything is all about the narrative."

Essentially, yes. Everything is relative, and since we have no base-principles to infer complex laws/rules/behavior from, we're constantly bickering with one another about minute details.

>"the interesting question is whether or not there ever really was a cycle where the citizenry were informed, and could collectively influence policy."

That's an interesting question. I can't say I can think of such a time. But I guess as a seemingly-intelligent and connected society with all of humanity's knowledge available at our fingertips, we should be striving for such a thing. Not defending an already-broken system just because we've decided it's "good enough".

It's nigh-impossible to actually do any sort of "corrective" maintenance on the system we have in place. Just look at Trump, or Brexit. The much-touted "checks and balances" is actively hindering his policies from being enacted (the one that got him voted in). Additionally, with Brexit, it's exposing just how complicated and intertwined global "contracts" and laws are between nations. In both cases we have giant behemoths of laws and processes in place to simply stunt any sort of correction or movement in any direction (whether good or bad). At that glacial pace, I don't think our life-spans are enough to see things through, or see drastic change or experiments when it comes to the models of government we've already-defined and have available.

[PatentTroll]

The checks and balances you deride are not abstract concepts, words do not leap from paper and take action. The checks and balances you disparage are people who disagree, which actually is how it's supposed to work.

[specialist]

Mitigate regulatory capture with transparency, accountability, publicity. aka "daylighting"

[rlucas]

Daylighting, or "sunlight as disinfectant," is great in a world where shame works and the appearance of rectitude is valued.

But we are seeing in US politics a world emerge where shame doesn't work, where players don't even try to appear honest, and where the very idea of consensus factual external reality is under attach.

In such a world, it will take a lot more than daylight to nudge good behavior from folks. It will take actual fear of being sent to jail.

[specialist]

I hear ya. I don't know how we got to this state, and I'm active player. Complacency?

The silver lining is that Trump was a wake up call. Many, many of my non-political friends contacted me and asked "What do we do? How do I start?" Our boring party meetings have triple the attendance. Any thing that needs doing now gets done.

For my part, I started a book study group, mentoring my friends how to be activists. For example, an upcoming homework assignment is testifying at a public hearing (local city or county council). Most of us have never even attended a meeting before.

Exciting times.

[_jtrig]

  I'm not sure of the fix, here.

1. We need a currency which supply and distribution of isn't under the control of corruptible humans.

2. We need to teach humans how to manage their own money and not give it away willingly to corruptible humans.

[DannyBee]

"Well, no, because the problem is not the regulation, but the lack of enforcement of the regulation. "

Problems in complex systems with large numbers of variables, attractors, etc are not solvable by just doing a single thing (if it was, it's not a complex system :P)

This kind of "if only x" thinking, IMHO, does not lead to actual solutions. It usually just leads to some other gravity well of the system, where now someone else says "if only y".