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by praxeologist
4257 days ago
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>My post boils down to a dirt simple but still basically correct: For banking regulated good, unregulated bad, very bad. For something this important, something dirt simple but still correct has some advantages. I don't think your analysis is correct much at all. Perhaps you are genuinely not aware that these crises were the result of government intervention. I suggest you to read Rothbard's What Has Government Done to Our Money here: http://mises.org/money.asp |
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Of course, there are many examples from history that support those points.
Right, on the banks, we can have (1) no regulation, (2) bad regulation, or (3) good regulation. I have to conclude that (1) no regulation is not a good solution because, with the history of banking crises, e.g., the crises that led to the 1913 regulations, when there was no regulation, since banking has such a crucial role in the economy and also has motivations for profit, we can too easily get serious systemic problems.
E.g., banks need to be told to have sufficient reserves.
For (2) bad regulation: Sure we don't want that.
For (3) good regulation, maybe we can't really get that. And maybe attempts at (3) historically have caused lots of problems, e.g., dumb, nasty governments printing money by the trillions of trillions.
Still, we don't want (1) or (2). So, we do the best we can trying to get (3). Here in the US, at least since 1933, I believe that the regulation worked fairly well (as intended, not so well more broadly, e.g., didn't get us out of the Great Depression; we didn't get people back to work until people started shooting at us and we started war production, in which case supposedly within 90 days everyone had at least one job offer and many people had 1+ jobs) until the crash of 2008. Well? No, only fairly well. My guess is that that regulation did work better than we would have had with (1) no regulation.
My first cut take on your concerns is that you are more concerned about the Fed and it's role in the money supply than just banking regulation. So, right, for a recent mess up, Greenspan actually feared, in simple terms, that all the computers would stop on January 1, 2000 and, from this fear, opened up the money supply to keep the economy going nevertheless and, net, printed too much money.
So, we get a suspicion: To drive the best in a straight line or fly an airplane at a constant altitude in a straight line, just tie the controls down with strong rope and keep human hands far away. Well, if only due to lots of random exogenous influences, that simplistic constant control doesn't work very well for cars, airplanes, or a money supply or an economy. Instead, we need a pilot, right, a good pilot, and maybe Greenspan was not so good near year 2000.
Or, maybe instead of a Fed, just go on a gold standard. Maybe.
But, I was talking about banking regulation and not so much what nasty governments can do to mess up the money supply with printed money.
We regulate lots of things, medicines (safety and efficacy), food safety, auto safety, building safety (e.g., building codes, e.g., to protect against another shirtwaist factory or whatever it was fire), caps on aspirin bottles, age for drinking beer, and much more.
Do I like some mandate of anti-lock brakes on cars? Nope: I don't want the extra cost at purchase or maintenance.
Regulation on car tailpipe emissions? Out in the country, say, 90% of the US land area, I see little need for the regulations, but I concede that in the cities the regulations are from helpful and justified up to just crucial. Yes, those regulations recently cost me $300 for a catalytic converter, with, maybe, platinum, when out in the country where I live a simple piece of pipe, for maybe $2, would have been fine. But, no joke, the regulations did a lot to clean up the air in the cities, with no doubt good health effects.
Even I'm not enough of a libertarian to conclude that we should have no regulations.