[zizek23]

Taxpayers are on the line for trillions of dollars with socialized risk and yet there are people on this thread regurgitating the same old anti-government anti-regulatory line without any irony. How can you roll back regulations without resolving fundamental questions about risk and 'too big to fail'. With citizens like this who needs oligarchs.

These are the same anti-government folks who will whine endlessly about social services as 'handouts' and 'freebies' and look the other way while trillions go to subsidize the rich and powerful. This is ideology.

Either you believe in democracy or you do not. In a democracy the government is you, not an organization out to get you. Regulations exist to protect the whole from the greed of a few.

This mythical anti-government civilization full of freedom only works in a farming based frontier society that has occupied land and can give parts of it away for free to all new comers, where any government can only take away rights. But that time is long gone.

[PurpleBoxDragon]

>Regulations exist to protect the whole from the greed of a few.

Regulations exist so that entrenched players can use the lethal force of government to block new challengers. Never quite as blunt as I put it, but that is the threat backing all the actual outcomes.

And the overall solution is to allow them to fail next time. Don't fix it, let it crash and burn. Stop socializing the losses since the profits were privatized.

[mikec3010]

>And the overall solution is to allow them to fail next time

Then pass a regulation barring the US from ever giving another "bailout". In the aftermath of '08 those corporations played the US like a fiddle to get their billions of dollars in free loans because "our whole financial system could collapse if you dont". Why wouldn't they play this game again, perhaps even more brazenly than last time?

[TooBrokeToBeg]

> Regulations exist so that entrenched players can use the lethal force of government to block new challengers.

That's not how it appears to everyone. That's often how they are crafted, but this is not a problem with the concept.

[JoeAltmaier]

There's actually a middle ground - EPA requirements, food and safety. True, most of the good ones end up repealed...

[sp332]

At least bail out the victims instead of the perpetrators.

[hackeraccount]

Just that. My own view is that regulations are antithetical to competition. Sometimes regulations are necessary but it's not true that they come without a cost.

[defertoreptar]

>In a democracy the government is you, not an organization out to get you.

Don't know if you missed this bit, but these rollbacks were voted on and approved by Republican (and Democrat) representatives, who in turn were voted for by the people.

>Either you believe in democracy or you do not.

It is possible to believe in democracy and also believe in limited government.

[tooltalk]

You seem to have selective memory -- those who are against these regulations and gov't welfare came out against the bank bailout back in 2008 and 2009 while those who are for regulation and gov't largess silently sat back and looked away.

I also found it quite ironic that the law that supposedly regulates the finance industry bears the names of two most corrupt politicians with close ties with banks (one with Fannie/Freddie and the other with AIG or the banking industry in general).

[mseebach]

If anything is mythological, it's this:

> Regulations exist to protect the whole from the greed of a few.

That's clearly one reason, and certainly the most commonly cited reason, but it's equally clearly not the only one, and it's certainly not the only outcome, whether intended or not.

The best buffer against "the greed of a few" is to allow real competition. Lightening regulations on smaller banks is quite likely to encourage competition.

[kingraoul3]

This ignores the natural tendency toward oligopoly in mature markets.

[mseebach]

Ironically, the opposition to the rollback ignores how in this case the regulation unintendedly encouraged and cemented said oligopoly.

[ComputerGuru]

I don't think it's fair for you to pretend you understand the psyche of everyone commenting on this thread and their opinions on "too big to fail" just because you don't agree with their viewpoints.

HN has a sizable portion of commenters with libertarianesque views, who would be in favor of reduced regulation while simultaneously deadset against subsidies and guarantees to banks and megacorps.

[tobmlt]

I'd like to point out an apparent oddity - that I, as a free market libertarian, agree with you that rolling back recent banking regulations is likely to lead to greater levels of exploitation of the populous by the banking/financial elite.

This does not negate the free market idea, rather we are just looking at a small detail in a larger picture. Without context things can be confusing.

The larger picture is that the banking system is not a free market entity. It was designed to prevent bank runs on insolvent banks - so that banks could practice currency inflation without, effectively, being called on it by other banks. (long story on inflation - most economists of course argue that it does not hurt the populous - some dissent...)

So anyway, the initial extra-market act - setting up the banking system, was designed to aid the banking elite in expropriating the wealth of the populous via systematic currency inflation - of course the stated aim was to "stabilize the banking system" and that is also true - prevent bank runs on insolvent banks so they can inflate more$$.

That stability, plus lots of greed, gave smart financial thinkers freedom to come up with yet more ways to exploit the system for their own benefit. Speculation in one kind of asset or another, etc etc.

Hence people decided the system "needed to be regulated" -- this new round of regulation needed to essentially quell the disturbances made possible by the first round - (the laws passed which created the banking system in the first place, here renamed as "the first round of regulation")

So sure - if we are going to have an artificial banking system propped up by law in the first place, it is only natural that it will require ever more regulation to keep it upright. After all, it is no longer "of the ecosystem" but "on top of it" - not subject to the full guidance of market forces.

Free market people who want to roll back recent, stabilizing, regulations, but support the banking system in general may not, in some cases, understand what they are asking for.