[ExI] Greenspan: rhetoric vs. reality

[Dan]

--- On Fri, 5/22/09, BillK <pharos at gmail.com> wrote:
> On 5/22/09, dan_ust wrote:
> <snip>
> 
> Thanks for describing in detail the wild excesses that lack
> of
> regulatory enforcement led to in the financial industry.

Huh?  Again, I wrote:

"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.)"

Do you disagree with this merely because of comments from Greenspan?  Was there no Federal Reserve System during Greenspan's tenure?  Were the Sarbanes-Oxley regulations not enforced from 2002 onward?  (During that time, I worked with several large companies that had literally roomfulls of people to deal with the regulations.  Do you believe this had no impact?)  Did the SEC do nothing at all from 1987 until Greenspan stepped down?  What of all those people fined or sent to jail for violating SEC regs?  How about the CRA?  Did it, by your reckoning, have no impact?

What of, too, the myriad other regulations that have been in plan for decades?  Were they suddenly not enforced at all during the Greenspan years?  Or was there a huge dip in enforcement?

Was this, too, by your lights the main cause of the current crisis?  The huge increase in the money supply and historically extremely low interest rates had little or no impact?  (Greenspan had a leading role to play in both those things -- being the chief person who set Fed policy on both -- though his successor is doing even more to grow the money supply, which will likely have "interesting" results in coming years.)

Furthermore, and going back to the earlier thread, how does this compare with the healthcare industry in the US?  Is that, by your reckoning, completely unregulated?  If so, would you care to start practicing medicine and making and distributing pharmaceutical drugs without a license?

Regards,

Dan