Amid Turmoil, U.S. Turns Away From Decades of Deregulation

Wall Street Journal ^ | July 25, 2008 | Bob Davis, Damian Paletta And Rebecca Smith

[calcowgirl]

WASHINGTON -- The housing and financial crisis convulsing the U.S. is powering a new wave of government regulation of business and the economy.

Federal and state governments alike are increasingly hands-on in their effort to deal with failing businesses, plunging house prices, worthless mortgages and soaring energy prices. The steps add up to a major challenge to the movement toward deregulation that has defined American governance for much of the past quarter-century since the "Reagan Revolution" of the early 1980s.

... The U.S. has swung back and forth from a hands-on to hands-off regulatory approach over the past 230 years. The debate over Washington's hand in the economy is at the heart of the presidential campaign. Both major-party candidates are endorsing proposals to create new, Federal Reserve-style commissions to limit greenhouse-gas emissions and decide how to spend billions of dollars on energy-efficient technology.

... It all adds up to more government activism, but an activism that relies more heavily on unelected bureaucrats rather than elected lawmakers. ... This nuanced view is reflected in the proposals of the presidential candidates. Sen. Obama wants a big push in spending on bridges, ports, railroads and other infrastructure, but worries about politicians doling out the money according to political whim. (That danger is also a long-time concern of Sen. McCain.) To insulate the spending, he would create a $6 billion bank patterned on the Federal Deposit Insurance Corp. ...

Sen. McCain has said he is open to a bailout of General Motors Corp., if it were threatened with bankruptcy amid falling sales and high costs, and wants to direct federal funds to develop new-generation automobile batteries and electric cars. "There's always a basic issue about what is the way to effectively harness private markets," says McCain policy chief Douglas Holtz-Eakin.

[calcowgirl]

Long article -- heavily excerpted

[rabscuttle385]

The same government that created the problem in the first place now thinks it can solve the problem it created. How pathetic.

[rabscuttle385]

Sen. McCain has said he is open to a bailout of General Motors Corp...

After he bails out Fannie Mae, Freddie Mac, GM, and a whole laundry list of U.S. corporations, who's gonna bail out Uncle Sam?

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[Republic_of_Secession.]

No kidding - interesting though.

[KoRn]

.

[AmericanInTokyo]

We are going down the wrong path. Regardless.

WITH or WITHOUT SCARFACE and WITH or WITHOUT BARRY HUSSEIN.

Poor Gipper in California turns in his grave up on the hill.

[calcowgirl]

Poor Gipper in California turns in his grave up on the hill.

Nixon lives! ("we are all Keynsians, now")

My reaction is more like the Gipper's.

[SuziQ]

I don't think de-regulation has created the problems in the banking and mortgage industries. I think Congress, in it's attempt to make home ownership more 'fair' created this problem.

Not everyone deserves to OWN their own home. Some folks just flat can't afford it. It has always been that way, and will continue to be so. Allowing banks and mortgage companies to loan to dodgy clients, and use questionable loan practices to do so, by pushing the fairness idea, only made those poor people victims of greedy and ruthless people who were more than willing to take their money, regardless of whether or not they could afford not just the purchase, but the upkeep of a home.

[steelyourfaith]

From the link:

" Dealing with global warming may augur a further expansion of government power. The leading proposal in Congress would cap emissions of greenhouses gases by industries and allow them to buy and sell emission permits.

The legislation garnered 48 votes in the Senate in a June procedural measure, leaving it a dozen short of the 60 needed to get a vote on the bill. Both presidential candidates have made emissions-trading systems a centerpiece of their environmental platforms, all but assuring another Congressional effort after the election."

 

Beam me to Planet Gore !

[E. Cartman]

After he bails out Fannie Mae, Freddie Mac, GM, and a whole laundry list of U.S. corporations, who's gonna bail out Uncle Sam?

So, then, MacCain is the sort of capitalist who believes risks and expenditures should be public, but profits private? That is WORSE than socialism and is akin to a monarch granting royaly monopolies to favored cronies.

[traviskicks]

Libertarian ping! To be added or removed freepmail me or post a message here.

[meyer]

I urge anybody to name one industry that has actually been deregulated. Electric? No - not when the government mandates that plants cannot be built, and not when the government orders utilities to share their infrastructure with competitors. Telephone? No. Cable? No.

It's a rather mis-used word these days - they call things deregulation but they are still regulated to the hilt.

[calcowgirl]

I don't think de-regulation has created the problems in the banking and mortgage industries. I think Congress, in it's attempt to make home ownership more 'fair' created this problem. ... Allowing banks and mortgage companies to loan to dodgy clients, and use questionable loan practices to do so, by pushing the fairness idea, only made those poor people victims of greedy and ruthless people who were more than willing to take their money...

I understand your point. But "allowing" them is what they probably mean when they label it "deregulation," (right or wrong).

[calcowgirl]

"...Both presidential candidates have made emissions-trading systems a centerpiece of their environmental platforms,
all but assuring another Congressional effort after the election."

Man your telephones, when the time comes! This has to be stopped.

[Jack Black]

This is a false dichotomy. The problem in the USA is with Government programs, not regulations. A regulated free market (within reason) is what we want. What you have here are quasi-governmental agencies (Freddie, Fannie) totally out of control, distorting the free market, sucking up all the oxygen in the room, and they failing.

Tighter regulation along with divestment of FedGov in this market *is* exactly what we want. FedGov *always* does a better job of regulating real business (sometimes too good) than it does of regulating itself. Which Freddie and Fannie are just another example of.

[djsherin]

That always seems to the be the case; health care anyone?

[Moonman62]

The government is drunk on regulations.

[calcowgirl]

I generally agree with you. The article points out that both of the candidates are leaning in the opposite direction, a cause for concern. In California, we are seeing this phenomena every day--new bureaucracies created, run by unelected, unaccountable bureaucrats operating beyond view of the citizens. It is a very dangerous trend, IMO.

From the article:

Both major-party candidates are endorsing proposals to create new, Federal Reserve-style commissions to limit greenhouse-gas emissions and decide how to spend billions of dollars on energy-efficient technology. ... It all adds up to more government activism, but an activism that relies more heavily on unelected bureaucrats rather than elected lawmakers. ...

[djsherin]

I think our current level of regulation is too high in many areas (nuclear, drilling, electricity, etc.) but I understand your point. The market needs certain basic regulations,but like I said, I think the current level is too high.

[SierraWasp]

"It all adds up to more government activism, but an activism that relies more heavily on unelected bureaucrats rather than elected lawmakers. ..."

GovernMental activism and advocacy as outlined in my tagline!!!