Quote:
Originally Posted by mpahlca
The weird thing about America to me, is Bush de-regulated your economic system and supposedly put the power in the hands of the private sector, doesnt seem to have worked out this time or when it was done in the late 20's early 30's both times you went into a depression.
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I'd say it is a lot more complicated than just that - in both the present instance and in the Great Depression.
If we limit the conversation to just regulation/deregulation though markets do need regulations and it is difficult to find the right degree of regulation. It can even change over time. If you go back to when the Dutch came to the US and started a market on Wall Street in New Amsterdam (now NYC) it was a very unregulated market. As late as the 1920s public companies didn't need to file accurate quarterly statements. The market crash and Depression taught us that we did need more regulation and thus was born the Securities and Exchange Commission. At one time there was not agreement on what accounting principles to use and thus was born GAAP accounting pinciples.
The same is true of many markets. Regulations and laws protect and direct the actions of those who buy and sell stocks, commodities, currency, bonds, life insurance policies, options and yes, even houses.
Recently we've learned we need regulation over various derivatives and so that will happen. We've also learned that we need new regulations or maybe even re-regulating the housing market.
All markets are constantly evolving - being further regulated and deregulated then regulated again. There have been plenty of mistakes if you want to call them that and it will happen again. More money than ever is chasing assets due to the construction of various legal entities and leverage. I think the first time it occurred to me that something new was going on is when Soros brought down the pound. We will have to be more vigilant than ever.