This perfectly captures my general thinking about markets and recent financial events. Hat’s off to Barry! But some folks think that the answer to our problems is better regulation. I view recent events as the result of too much regulation. Regulation must always fail in a changing world and regulations themselves create new problems. I’m not the least surprised when regulations do more harm than good. I’d rather trust the vagaries of the market than the vagaries of the “ne’er do wells, clueless dolts, political hacks” and other inhabitants of any political system, however well intentioned they might be. I’d rather be harmed by enemies than friends.
July 16, 2008 at 9:16 am
We went from a period of excess regulations (1968-1982) to a period of excess deregulation (1982-2005).
The Central Bank is supposed to regulate the commercial banks. One failure under Greenspan was the refusal to insist that banks ONLY LEND MONEY TO QUALIFIED BORROWERS.
This is the basis for problem now unwinding . . .