Comments on: Why Don’t We Get the “Right” Regulations?

By: patrick stephens at psjs.net » A Roundup

patrick stephens at psjs.net » A Roundup — Tue, 16 Dec 2008 20:43:55 +0000

[...] Will Wilkinson has a great comment on Peter’s post: The crisis was certainly caused in part by Wall Street-driven regulatory capture. The not-really-ideological point I seem to have a hard time getting across is that the root cause of an instance of capture is the set of prior institutional incentives that made capture possible and even likely. Our current period of newfound clarity about the need for reform does not put us in a position to finally and fundamentally fix the system. It just puts us in a different position — a position in which the incentives of the regulators have undergone a sudden and dramatic shock. Those with the power to influence the reform of regulation will now influence it in a different way — one that is not inconsistent with the regulators’ changed sense of mission. The chance that the outcome of this the process will be optimal approaches zero. And the chance that it sets in place a new set of unstable incentives that will take a decade or two to unwind approaches certainty. When the new regulatory settlement unravels, we’ll hear precisely the same things: that we didn’t have the right regulations in place because some opportunistic interests captured some part of the regulatory process. But if we know that’s going to happen in advance, shouldn’t we accept the limits on the possibility of effective long-term regulation and look for feasible alternatives to such thoroughly politicized financial markets? [...]

By: Paul McLeod

Paul McLeod — Tue, 14 Oct 2008 21:38:32 +0000

Argh. I was afraid of that. The effect is ruined, but here's the plain URL for the video I tried to embed: http://www.youtube.com/watch?v=DUWuUIiciWk

By: Paul McLeod

Paul McLeod — Tue, 14 Oct 2008 21:37:26 +0000

Tortured Analogy Productions presents:

MORE REGULATION
A Tragedy in One Act

Featuring:
Dr. Weird as "The Government"
Steve as "The Financial Markets"
and Corn as "Regulation"

Please replace "hungry" with "hosed".

The Acclaimed Prequel

By: catchy

catchy — Mon, 13 Oct 2008 14:37:17 +0000

You've made this pt. several x, but I don't know whether your analysis applies just to the US or what.

Your pessimism re: regulation seems to rely on general premises re infuence on gov. etc.

But there are places w. effective regulation. e.g. Canada maintained robust capital reserve requirements and their banks haven't melted down in anything like US fashion.

I'd like to know whether your claim is perfectly general. And if so, how do you account for e.g. Canada?

From my POV you seem to be participating in the general 'government is never the solution' culture that kept us from having the type of sensible oversight that was in place right above the border.

p.s. sorry bout your run-in w. Leiter. I study a phil. + think it's nice to have folk trying to bring philosophy to a wider audience...

By: TGGP

TGGP — Sun, 12 Oct 2008 21:52:36 +0000

Dain gives some evidence we shouldn't equate profit-sector and government agents that way here:
http://dryhyphenolympics.blogspot.com/2008/05/p...

By: DWAnderson

DWAnderson — Sun, 12 Oct 2008 20:23:10 +0000

I think this is mostly right, but it would help if you said some more about the level of generality at which the limits to effective regulation apply. If applied at the highest level of generality that would make any reform impossible under any circumstances.

By: Tushar

Tushar — Sun, 12 Oct 2008 19:07:22 +0000

Exactlyyy the point I was trying to get thru in the Financial Dirigisme Thread. its just so hard, I agree. Thank you