[ExI] More on US Health Care Costs

BillK pharos at gmail.com
Fri May 22 16:40:16 UTC 2009

On 5/22/09, Dan  wrote:
> Where was this "regulation free system" with regard to Wall Street?
> How is the US financial system -- one that is heavily regulated from the
> Federal Reserve System, the SEC, etc. on the federal level to a host of
> state and local laws -- "regulation free system" in your view?
> (And was it ever so?)  What of the Sarbanes-Oxley Act of 2002, the
> Community Reinvestment Act, Freddie Mac, Fannie Mae, and the myriad
> other interventions in the financial markets?  I might agree that there are
> times of more or less regulation -- often just times where one or more
> regulations is less enforced but the whole system of regulations remains
> in place -- but none in US history where it was regulation free.
> (Maybe the closest to the time was during the so called "free banking"
> period -- roughly 1837 to 1860 -- but even then the banks were still
> regulated at the state and local level.)

If you don't accept that lack of regulation was one of the main causes
of the financial crisis, then I think you need to do more
(Note: not lack of regulations. Lack of implementation of most of the

See the Wall Street Journal, February 17, 2009, (as one example of many):

The Greenspan Doctrine – a view that modern, technologically advanced
financial markets are best left to police themselves – has an
increasingly vocal detractor. His name is Alan Greenspan.

As Fed chairman, Mr. Greenspan was a frequent opponent of market
regulation. Sophisticated markets, he argued, had become increasingly
adept at carving up risk themselves and dispersing it widely to
investors and financial institutions best suited to manage it.

The retired chairman has had to revise his views. In comments at a New
York Economic Club dinner late Tuesday, the retired Fed chairman
steered clear of much self-reflection on his role in the credit boom.
But he did take a new swipe at the market’s self-correcting tendencies
and bowed his head to a new period of increased regulation.

“All of the sophisticated mathematics and computer wizardry
essentially rested on one central premise: that enlightened self
interest of owners and managers of financial institutions would lead
them to maintain a sufficient buffer against insolvency by actively
monitoring and managing their firms’ capital and risk positions,” the
Fed chairman said. The premise failed in the summer of 2007, he said,
leaving him “deeply dismayed.”



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