- Dec 11, 2006
- 7,851
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I am not an accounting / economics major, so someone with more knowledge please explain this to me. Weren't the regulations placed on certain industries because they were having issues in the first place? If that's the case, why would deregulating be good?
This thread is to discuss openly the pros and cons of more regulation versus deregulation.
I see that some people are calling for heavier regulations in Wall Street and trading of various commodities in order to prevent things like "short selling" (at least temporarily until things settle) and other scandals, but on the other side we have people calling for deregulations even in the midst of this crisis. Now the way I understand it is that some of the current crisis would have been avoided if there had been regulations in place which forced mortgage lenders to be more cautious when offering a loan and bundling these loans within packages which they then sell. So to me, it would seem here that more regulations would be in order to keep the mortgage market more stable, and would have helped prevent these "bad loans" from going out, which contributed to inflated home prices and increased amounts of foreclosures.
My personal experience: I worked for a very large national industry that after having existed for 75 years with no issue, and good profits, deregulations were put into place which caused the business to go under and everybody to get laid off. So perhaps my own opinions about deregulation are colored by getting laid off and forcibly undergoing financial hardship as a result (although I wasn't hit nearly as hard as some of my co-workers who lost their houses, etc..) So my personal experience is that regulating an industry would seem to stabilize it somewhat.
This thread is to discuss openly the pros and cons of more regulation versus deregulation.
I see that some people are calling for heavier regulations in Wall Street and trading of various commodities in order to prevent things like "short selling" (at least temporarily until things settle) and other scandals, but on the other side we have people calling for deregulations even in the midst of this crisis. Now the way I understand it is that some of the current crisis would have been avoided if there had been regulations in place which forced mortgage lenders to be more cautious when offering a loan and bundling these loans within packages which they then sell. So to me, it would seem here that more regulations would be in order to keep the mortgage market more stable, and would have helped prevent these "bad loans" from going out, which contributed to inflated home prices and increased amounts of foreclosures.
My personal experience: I worked for a very large national industry that after having existed for 75 years with no issue, and good profits, deregulations were put into place which caused the business to go under and everybody to get laid off. So perhaps my own opinions about deregulation are colored by getting laid off and forcibly undergoing financial hardship as a result (although I wasn't hit nearly as hard as some of my co-workers who lost their houses, etc..) So my personal experience is that regulating an industry would seem to stabilize it somewhat.
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