Regulation and Financial Disasters

 

The purpose of the administration’s attempt to regulate the economy amounts to an attempt to smooth out the effects of booms and severe financial jolts and recessions.

                       

The U. S. has repeatedly been through recurring economic cycles over the years. Other economies around the world have experienced the same.

                       

The bottom line: Overly-strict regulation never works. The effort always has a short term goal, but, nevertheless, is used because it’s always a political measure to temper public unrest.

                       

Dodd-Frank is excessive regulation that does not help. There is the usual political factor that overrides all supervision that the regulation affords. Easy money and the subprime crisis were what Congress and the administration created, not the lack of supervision.

                       

Simple bank guarantees and not having “mark-to market” accounting for banks in an emergency, would have been the alternative solution for 2008-2009. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole tweets.)