{"id":1604,"date":"2010-03-10T07:44:31","date_gmt":"2010-03-10T12:44:31","guid":{"rendered":"http:\/\/nicholsclan.com\/tinblog\/?p=1604"},"modified":"2010-03-10T09:02:41","modified_gmt":"2010-03-10T14:02:41","slug":"usa-go-bragh","status":"publish","type":"post","link":"https:\/\/timscogitorium.com\/tinblog\/2010\/03\/usa-go-bragh.html","title":{"rendered":"USA Go Bragh"},"content":{"rendered":"

St. Patty’s Day is neigh, but there’s more to learn from\u00a0 our Irish brethren than how to swill green beer and appreciate boiled cabbage.\u00a0 Paul Krugman offers an interesting analysis<\/a> looking at both Ireland, whose financial system melted down like our did, and Canada, who was fairly unscathed by the recent economic disaster which befell much of the world.<\/p>\n

While there are several lessons to be learned, the major common thread seems to be effective regulation.\u00a0 Ireland, like the USA lacked enforced constraints on its financial markets while Canada kept their bankers contained.\u00a0 Interestingly, the effective legislation is pretty similar to the regulation the US had from the Great Depression up until Reagan started taking it apart.\u00a0 Note that this was also a time of financial stability, where post-Reagan decades have seen much more volatility from the financial sector (e.g. the S&L Meltdown), culminating in the recent near-depression.<\/p>\n

The lessons of history and of other countries seem very clear.\u00a0 Our financial prosperity depends in no small part of stability of our financial markets.\u00a0 And that stability is achieved through good regulation.\u00a0 Sure, this means that bankers and investors won’t have the opportunity to get obscenely rich.\u00a0 But it also means your 401K won’t bounce around in value so much and we won’t be saddled with bailing out failed banks at taxpayer expense.\u00a0 Seems like a fair trade to me.<\/p>\n

And no, this is not “Socialism.”\u00a0 That would be where the government owns the bank.\u00a0 Ironically, TARP brought us closer to socialist banking, or would have had we put any intelligent constraints on the money we gave away.\u00a0 It is simply intelligent capitalism.<\/p>\n

Note that the government plays this role in many markets where the market is of vital interest to nearly everyone.\u00a0 The power industry, the food industry, and the telecom industry are regulated precisely because losing them would be an untenable burden on the country.\u00a0 Banks and health insurance companies are no different.<\/p>\n

We ignore these lessons at out own peril.\u00a0 Many on both sides of the aisle pine for the good old days.\u00a0 The days when growth and prosperity seemed endless.\u00a0 Those were also the days when financial institutions were regulated for the safety of us all.<\/p>\n","protected":false},"excerpt":{"rendered":"

St. Patty’s Day is neigh, but there’s more to learn from\u00a0 our Irish brethren than how to swill green beer<\/p>\n

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