Someone else read my mind and said it better

| Friday, October 1, 2010
But there's a larger, more philosophical question here. If we could just depend on everyone to do what was prudent and sensible at all times, why would we need any laws at all? People act against their own and society's interest all the time. You couldn't ask for a better demonstration of this than the frenzy of chicanery that suffused every level of the residential housing market, from subprime loan to synthetic CDO. Ideally, we'd rather avoid scenarios in which the financial system collapses, costing trillions of dollars to resuscitate and resulting in the loss of millions of jobs. If that means protecting consumers from their own "stupid" decisions -- and, much more important, preventing financial institutions from taking advantage of those consumers -- then so be it. That's a good deal!

-Andrew Leonard, staff writer at Salon

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3 comments:

Dan said...

One step to preventing engineered financial disasters, such as The Great Depression of 1929 and The Great Recession of 2008 (along with other engineered financial disasters), would be to remove the ability of finance companies to operate for profit. Public state-run personal and business banks, credit unions, universal health care and state-backed property, casualty and liability insurance worldwide would severely limit the ultra rich's ability to eliminate the middle class. That's what the bankers and insurance people want to ultimately do - eliminate the middle class. They're doing a damned fine job at doing it too.

We Fly Spitfires said...

The problem - at least as far as my feeble mind sees it - is that most Western countries have two main political parties that represent either the extreme Right or the extreme Left and, in reality, what is actually needed is a balance between them both i.e. free enterprise with restriction.

Klepsacovic said...

@Dan: Insurance is an industry that makes no sense at all as for-profit, since ultimately it's just a numbers game, not a place that needs the innovation of the free market. But government-run banks often turn into weird forces in the market, such as in Iran where at times (or maybe still) the savings rate was higher than the lending rate.

@We Fly Spitfires: Our primary system does tend to bring out extremes, but thanks to our extremely expensive elections in general, you can be sure than any candidate has been bribed by all interested parties. But less cynically, I agree; regulated free markets are pretty awesome.

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