bigmacbear | Just what the doctor ordered.

fuzzbearmark posts a link to this article and asks if we are ready for "more stifling Government Controls?" While acknowledging the negative tone of the question, I submit to you all in answer that tighter regulation of financial institutions is precisely what we need.

The root cause of the credit crunch is that certain banks and insurers bet, in the guise of insurance contracts that were not regulated as such, vast sums of other people's money (read: yours and mine) that certain events would not happen. Then, for a number of reasons including overextended homeowners, house-flipping, predatory lending, and the soaring prices of oil and foodstuffs last summer, the bettors lost and the vast sums of money evaporated, impoverishing most of the nation.

Simply put, this kind of situation could not have happened with the kind of financial oversight wisely put into place during the aftermath of the Great Depression, and dismantled primarily under the Reagan administration with the final acts occurring as late as the Clinton administration. Absent these regulations, there has been far too much of the fox guarding the henhouse.

Unfortunately, whatever re-regulation Obama proposes will likely not go far enough, since it retains power in precisely the wrong institutions. The heads of Treasury and the Fed have ties to the very same banks and insurers that caused the crisis in the first place. And many folks blame the Fed for many of the nations' woes, arguing that Congress should never have allowed its prerogatives of making money to be delegated to a private entity beholden to its owners (the major banks of the country) -- and some argue that act was in fact unconstitutional.

But some form of re-regulation will have to be put in place, if only to assuage the anger of the defrauded American people, swindled out of their life's savings by predatory lenders and gamblers in the derivatives markets.

Flat | Top-Level Comments Only

Although I do agree that Regulation was {is} in order, the form of Government Control and Regulation is not welcome here.

Take a look at the programs/institutions they run already -none of them run well and ALL bankrupting us as a Nation. I do not want to see Banking run as the Post Office is, or all of Health Care run as Medicare is handled. It is "putting out fire with gasoline"

Well, actually, the Post Office is an independent agency owned but not necessarily operated by the government, and Medicare is simply a publicly funded health insurance program covering basic care for certain classes of people who simply cannot afford it. Both have their flaws, but clearly there is a need for these agencies and in many cases they actually do better than their for-profit counterparts could. Were that not the case, the pressure on the government to divest itself of these entities would be great, and they would cease to exist.

Regulation of the banking system simply defines the rules under which those in the banking business must carry it out to avoid overextending themselves and wrecking the national economy for their own profits. It neither requires nor necessarily benefits from government ownership or nationalization of the banks, which appears to be the specter you raise here.

Oh, and by the way, not everything necessarily ought to be a for-profit business. The question is where to draw the line, and I think we can agree to disagree on that point.

articulated very well, Mike.

I'd LOVE to see a single-payer health care system as efficiently run as the U.S. post office! We have a damn good post office in this country.

the US Postal System has been widely regarded by wise economists as an abysmal failure. They are highly mis-managed, cannot seem to control expenses, keep up with technology etc.

If it did not need to suck the teat of the Federal Government
(and therefore US Taxpayers) it would have gone out of business years ago. Its competition with private-owned companies such as UPS and Federal Express are highly successful as compared to the USPS.

They cannot keep in budget, compete, nor are they efficient enough for 2009. Most of the "bleeding" happens behind the scenes as they suck up our tax dollars. They are considered one of most shameful examples of our Federal Dollars at work.

"wise economists" is a highly subjective term.

I'm a BIG FAN of the U.S. Postal service, and see it as an overwhelming success!

I'm glad you believe as you do. I however do not and will leave it at that.

Sorry Mark, in the light of current world financial turmoil, I too would dismiss such throw away comments as 'wise economists'. These current problems had A LOT to do with the majority of people believing that a small minority knew all about money and how to run the world. Some of that minority turned out not to understand what they were peddling and some knew all too well but were just crooked. This is where STRONG government regulation comes into play. Government exists to govern. That means not just arguing the toss about gay 'marriage' but to create a fair and level playing field in which ALL of us can live, work, do business and prosper.

On the subject of the post office - I live in the European Union (also known by its project name 'The Single Market'). Founding principle number one - 'The free movement of goods, capital and people'.

There are only two ways you could make this baby fly - pan-nationalise everything (can you imagine the arguments and power struggles) OR as we are doing (coz its easier) privatise the hell out of everything.

The UK Post Office is not yet privatised. It is however open to some competition as EU directives rack up the pressure. One day it will be privatised but there will be MANY fights before then.

People worry about: jobs, the killing of small rural communities through local PO closures, delivery service levels and universal delivery at a standard affordable price.

These problems can (with imagination) be overcome HOWEVER to quote the OECD 'Reform of this sector needs to be handled thoughtfully and with attention to employment and universal service issues. Specific attention must be paid to introducing new regulations which ensure non-discriminatory access to essential facilities'. THAT TRANSLATES AS GOVERNMENT ACTION AND REGULATION.

Just what the doctor ordered.

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