[FoRK] The Wrecking Crew - A Low, Dishonest Decade

Bill Stoddard wgstoddard at gmail.com
Wed Jan 20 12:34:03 PST 2010


On 1/20/10 3:01 PM, Bill Stoddard wrote:
> On 1/19/10 9:45 PM, Jeff Bone wrote:
>>
>> So, final conclusions:  *government* regulation and moral hazard are 
>> two sides of the same coin, and that has to be managed very carefully 
>> by policy makers and would-be regulators.  There's a role for the 
>> government regulation, but beware the possible moral hazards that 
>> usually go along with it (and other unintended consequences as 
>> well.)  And --- self-regulation via social norms, peer pressure, 
>> clearly articulated ethics and practices, and self-interest *can* 
>> (but do not always, or even necessarily usually) accomplish the same 
>> desired goals that progressives might seek (but often fail to 
>> achieve) through greater, coercive government regulation;   cf. the 
>> FX market as existence proof.
>>
> Correct, but completely useless, conclusion. 
> Government regulation is a simple fact of life. 

So how do you feel about regulation to limit the amount of leverage a 
bank can utilize to, maybe 10x?  Leverage is the money machine for 
financial firms so I would expect the ibanks to kick and scream.  If a 
bunch of  noble prize winning smart guys can't get it right, thwn 
putting a low limit on leverage seems to be most prudent.  You agree?

Just out of curiosity, Jeff, what do you think about cap-n-trade? Good 
idea or no?  (my opinion, it needs to be shot on site. REALLLLLY bad idea.)

Bill


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