At present, the pendulum has swung far enough in the direction of deregulation of financial markets that certain bankers got away with very shady dealings, directly leading to the financial burst we have seen. After Enron, a rush to limit deregulation and indeed introduce new compliance laws came up, and that, I think, was the beginning of the end of this era of deregulation.

At any rate, increased regulation can lead to some glaring inefficiencies and lost productivity. But it can also lead to a decrease in the near-criminal behavior that got the U.S. into its present troubles. As long as industries have a voice in how they are regulated, overly burdensome rules can be avoided.

posted 1 month ago

There are areas that will require additional regualtion or more stringent enforcement.
Of course what comes to mind first is regulation of financial markets, specifically commodities and derivatives.
Stricter enforcement of FDA oversight in the importation of foods and toys and accompanying corporate oversight is required.
Legislative and following Administrative action in the revision of immigration policy or stringent enforcement of existing regulations on immigration.
Also there seems to have been a slackening of oversight in the area on export administration, particularly with respect to dula use technology to China.
Traditionally administrative and regulatory actions increase under Democrat's and decrease under Repbulicans.
The problem for greater regulation becomes the funding of departments and agencies, as well as the cost of compliance to businesses.

posted 1 month ago

When it comes to the financial markets and institutions, there has never been a "de-regulation," so to speak. There has always been some form of regulation.

In the 80's, a move to rely on market forces, rather than government regulation, was the direction taken in many areas. And, in many aspects, the US and world economies benefited from that. However, over time, this greed turned into bad practices. These bad practices helped create paper profits and wealth, but created instability within the organizations that practiced them.

Then, as one company started out-pacing others in their sector, the other companies were forced to adopt some of the same bad practices in order to be perceived and viable, thus creating instability and eroding their foundation.

Though problems would surface at times, 2001-2003 was the first wave of significant exposure. Issues at Enron, MCI, and others helped Sarbanes-Oxley come into existence. (SOX has its own issues because too many parts are too poorly defined and inconsistently applied from company to company.) But, with this, accounting rules underwent significant changes, and there are still major changes coming.

Now, the financial markets are unraveling because of the bad practice of extending too much credit to trustworthy folks, extending significant credit (including mortgages) to those who were unlikely to pay it back, and with many (especially some credit cards) being able to change the rules for those to whom they extended credit that can and has changed "on a whim," with no good explanation and accountability.

With all that said, the United States is in a major election year, meaning that through the end of this year, and into next, candidates and newly elected representatives are trying to prove themselves. This often creates "knee-jerk" reactions at attempting to solve the symptoms of a problem without ever looking at the actual problem. I fully expect to see a number of pieces of legislation that will over-regulate certain aspects of the financial community over the next 24 months, or more. Instead of helping, many of these will probably make matters worse.

Some of this has already started with new interpretations for rules for shorting in the market. Who knows what is next? But, I do believe that if something is to be done right, make sure the government is not involved. However, the free-market economy has not policed itself as well as one would hope, and too many bad practices were propagated instead of outed and stopped.

posted 1 month ago

In a broad sense I hope that the deregulation bandwagon is at an end. While regulation can create some inefficiencies those costs pale in comparison to the costs to the American taxpayer and the economy as a whole.

The recent history of deregulation itself is a mixed bag of misfortune, larceny and an occasional bit of light. We can start with the 80's and see how the S&L "crisis" not only cost the tax payer about 80 billion but we are still paying interest on that payout to this day,. The "Enron loophole" courtesy of McCain economic 'consultant' Phil Gramm proved to be a disaster to the California economy and cost our state about 10 billion to 15 billion dollars.And so on and so on to the current insane costs incurred by the mortgage meltdown.. I'd love for someone to do a study as to how much this panacea of deregulation has cost us since 1980. My rough guess is 500 billion in costs or lost revenue to the government, and a similar amount in costs to business and consumers.

I can only look and shake my head when the tomato industry falls victim to its own machinations that cut back regulations regarding the ability of the government and business to trace produce back to its original source.
The current cost to the tomato industry as of the last estimate was 100 million dollars. Not much of a good investment, especially since the lobbying effort cosst at least a few million in the first place.

In addition I find it appalling that SOX is being attacked despite the fact that it has increased market confidence and share value. Not to mention providing lots of jobs to people at Oracle, SAP, Symantec/Veritas....etc.

My own feeling is that review of regulation is necessary but please, enough of this deregulation to satisfy some political ideology or to eke out a few bucks more out of one's bottom line. Heck, all these costs could be taken care of by bursting the c-level salary bubble.


Remember, every time we deregulate a bell rings and the taxpayer gets screwed royally again.

posted 1 month ago

De-regulation is a sword of two blades, on one end the argument can relate de-regulation with a raise competitiveness that can continue until the market settles. However, unforeseen variables can disturb the market’s beyond the consumers tolerance. At this point, some regulation is required to ensure market fluctuations are within certain acceptable levels. Regulation is required at least in minimal form, de-regulation can not be total, some regulation can become necesary.

posted 1 month ago