tag:blogger.com,1999:blog-5806884.post6655495295196924964..comments2023-10-31T03:18:26.963-07:00Comments on Great Guys Weblog: Great Recession(3): rules and regulationsBrethttp://www.blogger.com/profile/15063508651955739056noreply@blogger.comBlogger16125tag:blogger.com,1999:blog-5806884.post-60911682013573204172010-04-29T10:30:37.575-07:002010-04-29T10:30:37.575-07:00That Shinseki was right and Bush wrong is not a ma...That Shinseki was right and Bush wrong is not a matter of opinion. Nobody now argues that the Army was not too small for the task it had to undertake.<br /><br />Shinseki and many other people (me among them) knew that beforehand.<br /><br />Incurious George seemed not to be interested.Harry Eagarhttps://www.blogger.com/profile/04196202758858876402noreply@blogger.comtag:blogger.com,1999:blog-5806884.post-21350869456122588842010-04-28T12:19:09.090-07:002010-04-28T12:19:09.090-07:00IYO.IYO.erphttps://www.blogger.com/profile/09826044412670324694noreply@blogger.comtag:blogger.com,1999:blog-5806884.post-7594736527598303682010-04-28T11:01:28.755-07:002010-04-28T11:01:28.755-07:00Harkin was a successful business? News to me.
Or ...Harkin was a successful business? News to me.<br /><br />Or were you thinking of the Rangers?<br /><br />What difference does it make how bad Gore would have been?<br /><br />Being is nice guy is not the same as being competent. Recall FDR's homely (if disingenuous) explanation for Lend-Lease: If your neigbor's house is afire, wouldn't you lend him your garden hose?<br /><br />Well, with Bush, the house was ablaze from foundation to rafters, and he just looked on in silence. <br /><br />If you want an example of someone who did what he thought was the best for his country without thinking of the consequences to himself, I suggest you consider Eric Shinseki.<br /><br />Bush fired him and thousands of young Americans were killed or suffered horrible injuries as a result.<br /><br />In the end, it doens't matter whether Bush was stupid or smart, corrupt or upright. He was wrong.<br /><br />As Talleyrand said of the murder of the duc d'Enghien: 'It was worse than a crime. It was a mistake.'Harry Eagarhttps://www.blogger.com/profile/04196202758858876402noreply@blogger.comtag:blogger.com,1999:blog-5806884.post-39722311340651328022010-04-27T11:58:27.861-07:002010-04-27T11:58:27.861-07:00Harry, do have any thoughts on how the world would...Harry, do have any thoughts on how the world would be today had, <i>God Forbid</i>, Gore, who's stupid (he flunked out of divinity school for goodness sake) on steroids and venal as well, had won the 2000 election?<br /><br />Bush is the most honest and courageous man in politics during my lifetime. He did what he thought was right for our country without worrying about getting the credit or the blame and he received degrees from Yale and Harvard, ran a successful business and was a great governor. He never claimed to be a great scholar, but released his academic as well as his medical records ...<br /><br />You may disagree with how Bush governed, but please drop the name calling.erphttps://www.blogger.com/profile/09826044412670324694noreply@blogger.comtag:blogger.com,1999:blog-5806884.post-50656255175578057442010-04-27T09:45:35.124-07:002010-04-27T09:45:35.124-07:00Oh, I believe there are bad regulations, and in re...Oh, I believe there are bad regulations, and in regulatory capture.<br /><br />Glass-Steagall was a good example of good, but light regulation. <br /><br />What's really bad is having a regulation and then deliberately refusing to enforce it. Then you get the worst of both.<br /><br />If you want to make a distinction between ignorance and stupidity, then Phil Gramm is ignorant and George Bush is stupid.Harry Eagarhttps://www.blogger.com/profile/04196202758858876402noreply@blogger.comtag:blogger.com,1999:blog-5806884.post-9707296455231845382010-04-26T15:45:35.108-07:002010-04-26T15:45:35.108-07:00SH,
A good one. It can be made to look like a re...SH,<br /><br />A good one. It can be made to look like a reform while actually furthering cronyism.Howardhttps://www.blogger.com/profile/14980738175201874292noreply@blogger.comtag:blogger.com,1999:blog-5806884.post-87516284629250472762010-04-26T14:35:33.314-07:002010-04-26T14:35:33.314-07:00Let's not be theoretical about it, Howard. We ...Let's not be theoretical about it, Howard. We can consider <a href="http://biggovernment.com/capitolconfidential/2010/04/21/obamas-back-door-bailout-of-wall-street/" rel="nofollow">actual main stream legislation</a>.Susan's Husbandhttps://www.blogger.com/profile/02862667802025231163noreply@blogger.comtag:blogger.com,1999:blog-5806884.post-68848975013448753572010-04-26T12:04:07.489-07:002010-04-26T12:04:07.489-07:00Harry,
why did Wall St. banks send a trillion dol...Harry,<br /><br /><i>why did Wall St. banks send a trillion dollars to 'the South' in the '70s, saying that sovereigns would never default, when they had the example of what Argentina did to Barings in 1890.<br /><br />No matter how I approach it, I cannot fail to conclude that top bankers are all stupid.</i><br /><br />I think you mean ignorant of such history rather than stupid, although that may apply as well. Funny that you mention that episode. On several occasions my dad and I have recalled our conversations from those days about how the recycling of petrodollars by money center banks was bound to end badly. Of course the Walter Wriston statement about sovereigns not defaulting was extra special.<br /><br /><i>If there is any real market discipline, I cannot find it.</i><br /><br />Bankruptcy/failure is the ultimate market discipline. The government let's small banks fail but is in bed with large banks preventing market discipline. They should update bankruptcy law to handle this well.<br /><br />Regarding regulation, as SH wrote:<br /><br /><i>Our "crusade" isn't against regulation per se, but against unproductive regulation. That is, unless one can show that regulation improves a situation, it shouldn't exist. I think our difference is that we believe that it is possible for regulation to be a systemic negative, where as Mr. Eagar doesn't.</i><br /><br />Poorly conceived rules can actually contribute to creating big problems.Howardhttps://www.blogger.com/profile/14980738175201874292noreply@blogger.comtag:blogger.com,1999:blog-5806884.post-8172560528562569262010-04-26T09:07:10.112-07:002010-04-26T09:07:10.112-07:00Whatever the reason they were unreliable -- and yo...Whatever the reason they were unreliable -- and you have not shown that regulation was that reason -- they ought to have known and drawn conclusions accordingly.<br /><br />Rubin, for example, is on record as saying that banks must participate in dodgy sectors, even if they know about structural problems. Rubin is no friend of regulation.Harry Eagarhttps://www.blogger.com/profile/04196202758858876402noreply@blogger.comtag:blogger.com,1999:blog-5806884.post-35921860317680206562010-04-26T09:06:28.376-07:002010-04-26T09:06:28.376-07:00As Howard points out, the primary cause of lack of...As Howard points out, the primary cause of lack of market discipline is government intervention. The people who were realized the ratings were junk also presumed that the government, having intervened so strongly all along, would continue to do so.<br /><br />Our "crusade" isn't against regulation per se, but against <em>unproductive</em> regulation. That is, unless one can show that regulation improves a situation, it shouldn't exist. I think our difference is that we believe that it is possible for regulation to be a systemic negative, where as Mr. Eagar doesn't.<br /><br />Note also a fundamental asymmetry -- "free markets" have a well understood policy implication. But "regulation" can mean the GM bailout, CRA, the NLRB, DOD purchasing procedures, wage and price controls, union card check, campaign finance "reform", etc. It's a wonderful catch all that Humpty Dumpty would be proud of.Susan's Husbandhttps://www.blogger.com/profile/02862667802025231163noreply@blogger.comtag:blogger.com,1999:blog-5806884.post-68256414095634683872010-04-26T08:29:46.916-07:002010-04-26T08:29:46.916-07:00Harry,
So, everybody should know that the ratings...Harry,<br /><br />So, everybody should know that the ratings by agencies that exist in their current form due to a government monopoly should be unreliable. Maybe so. But that seems like a government regulation failure right there.<br /><br />There is no market discipline because the government has distorted the market so badly that it's unrecognizable. Your solution? More government! You can't even see the hint of irrationality in that?Brethttps://www.blogger.com/profile/15063508651955739056noreply@blogger.comtag:blogger.com,1999:blog-5806884.post-1651806659971961532010-04-25T00:00:40.289-07:002010-04-25T00:00:40.289-07:00Yes, but everybody paying attention understood tha...Yes, but everybody paying attention understood that the ratings were not reliable. Or should have.<br /><br />Or, why did Wall St. banks send a trillion dollars to 'the South' in the '70s, saying that sovereigns would never default, when they had the example of what Argentina did to Barings in 1890. <br /><br />No matter how I approach it, I cannot fail to conclude that top bankers are all stupid. If there is any real market discipline, I cannot find it.Harry Eagarhttps://www.blogger.com/profile/04196202758858876402noreply@blogger.comtag:blogger.com,1999:blog-5806884.post-81994021172827025382010-04-24T21:57:57.070-07:002010-04-24T21:57:57.070-07:00Harry Eagar asks: "What explains why people w...Harry Eagar asks: "<i>What explains why people who were not regulated in any way bought the same stuff?</i>"<br /><br />If paper was rated AAA, then that would make it desirable, even if it was misrated due to regulation.Brethttps://www.blogger.com/profile/15063508651955739056noreply@blogger.comtag:blogger.com,1999:blog-5806884.post-77216418065268744472010-04-24T07:25:41.716-07:002010-04-24T07:25:41.716-07:00Let's say you have described how certain peopl...Let's say you have described how certain people were forced/encouraged to buy bad paper.<br /><br />What explains why people who were not regulated in any way bought the same stuff?<br /><br />That's really the big thing I don't get in the crusade against regulation. Why do you blame regulation for events that it could not possibly have affected?<br /><br />It's sort of like Skipper's new post about driving on the cell phone, only upside down. There Skipper argues that regulation had no effect (notwithstanding we can pick out instances in which drivers on the cellphone crashed). Here you argue (if you step back and look at the big picture, the way Skipper did, that regulation had power even where its writ did not run.<br /><br />To me, however sophisticated, this is (a la Hayek) picking a conclusion and arguing back to it.Harry Eagarhttps://www.blogger.com/profile/04196202758858876402noreply@blogger.comtag:blogger.com,1999:blog-5806884.post-34065089604654730372010-04-23T13:21:43.971-07:002010-04-23T13:21:43.971-07:00Skipper,
Glad you found it worthwhile. I can'...Skipper,<br /><br />Glad you found it worthwhile. I can't tell you how many times a careful investigation of some matter has left me dumbfounded. Although talk about stupid, one of the all time best was what happened in the California electricity market. Let's not call it deregulation. Although some elements were freed, other activities just had changed regulatory regimes. It took very little effort to see that the disaster that occurred was almost inevitable given the new rules. The rule design was so stupid my thought was that this must have been designed by Mensa members.Howardhttps://www.blogger.com/profile/14980738175201874292noreply@blogger.comtag:blogger.com,1999:blog-5806884.post-13083839608910218322010-04-22T20:00:48.926-07:002010-04-22T20:00:48.926-07:00Howard:
Thanks for putting in the time -- it is o...Howard:<br /><br />Thanks for putting in the time -- it is one of the best items I have read yet on the subject.<br /><br /><i>In the absence of free entry into [the rating] market, there was no way to correct the mistakes of the cartelists. There was no Hayekian learning process in place.</i><br /><br />When I first heard about this, my immediate reaction was: You are kidding, right? No one could possibly be <i>that</i> stupid.Hey Skipperhttps://www.blogger.com/profile/10798930502187234974noreply@blogger.com