http://nomedals.blogspot.com

Thanks much for that rundown. I’d note that many of the items you list are actually non-regulation or failed regulation rather than de-regulation, i.e. it’s not that we changed something that had been right before. This includes financial derivatives, which were exempted from regulation when similar markets were regulated in the late 1990s. I make the distinction because I am concerned that some wish to scapegoat certain measures that actually proved very beneficial, e.g. Gramm-Leach-Bliley.

I don’t want to say that we don’t need better regulation and in some cases more regulation. Some past decisions not to regulate have also been problematic.

It was not so much an issue of regulations being explicitly repealed, of regulators failing to keep pace with innovation in financial products.

Sadly, as usual, we’re getting the cause wrong, so how can we ensure we’ll get the fix right?

A commission needs to be set up to thoroughly consider the causes of our current state of affairs.
Otherwise, we’ll just live for decades in a myth as we did after the Great Depression, where we told ourselves that the crash was somehow caused by the economic growth of the 1920s. Today, we accept it was a monetary rather than a fiscal event, but it took a long time to figure this out.

A short history of modern finance
Link by link

Oct 16th 2008
From The Economist print edition
The crash has been blamed on cheap money, Asian savings and greedy bankers. For many people, deregulation is the prime suspect.

The best he can do now is delay whatever changes the Obama administration will make.

Or are we (you) just adopting the Bush mindset? [just like this!]

How about this somewhat dramatized line with this somewhat epileptic metaphor:

“We have said on this site that stabilizing the financial system was job one, and the patient is stable.”

Have there been financial systems in the past that were good on Friday but gone on Monday?

And this:
“The many years of deregulation that helped bring on the crisis, to be fair, predated Paulson’s tenure,” To be even fairer didn’t Hank amass his fortune on those “many years of deregulation”…wazinit this bum who just prior to The Sinking wanted even less regulation (hard to imagine, now …and even harder to go back and dig out the nitty gritty) less ~”the financial center of the world move to London”?

What year here:
“But the insistence that everything was fundamentally sound through the first half of September”… For some of us the flag went up with the construct of TAF in late 07, you?

“While the patient was saved, he is still far from health.”

I am tiring of these metaphors (we are all patients now…some of us need saving from..this very descriptor, you know?) [Desperate humor: the patients are impatient.]

Last irritable thing:
“The economic ideology of the Bush administration was that free markets are always best.”

In my warped, angry, impatient but legacy-free opinion, to ascribe to anyone an “ideology”, let alone some particular variant (The economic ideology), presupposes some weighty sophistication both on the part of the ascribee and the ascriber. Lets skip right to it: GWB’s sophistication and the barbarian’s is a match. Return to O’Neill and see if ain’t so.

It’d be very Bushian, and the sort of thing that a Wall St CEO wouldn’t be above.

I’d love to hear more about the “many years of deregulation that brought about the crisis.” So far, no one has adequately fleshed this statement out beyond an Obama sound bite.

More please.