Wall Street Must Be Regulated

More regulation is required?

Where then is the red line that is crossed into socialism? How far do we go?

Following are the traditional steps of the regulating roller-coaster ride we keep taking, even though we throw-up every time we get off the ride:

Step 1 : opportunists create massive companies of which 1000's of people depend upon — only through the individual choices of all involved.

Step 2 : opportunists make mistakes and put their companies in jeopardy. Sometimes they succeed, sometimes they fail.

Step 3 : the 1000's of people that have PUT THEMSELVES in place to depend upon the opportunists, cry-wolf when things go belly-up.

Step 4 : regulation is put in place because things aren't "fair". Because in LALA-land, companies should never go bankrupt.

Step 5 : regulation costs money, all the way down to the paper it is printed on and the political officers paid to regulate.

Step 6 : the opportunists, with their massive monetary backing, move themselves into position to regulate themselves as the rules have changed towards socialism.

Step 7 : the opportunists regulate themselves and make the "easiest" money they have ever made — but not the most. With regulation in place, profit is no longer the goal : the goal is to become an indestructible institution that will never fail.

Step 8 : the economy collapses due to the unrealistic dreams of creating indestructible institutions that will never fail.

@ Phil

I believe you are confusing regulation with intervention and manipulation.

@Peter

I appreciate the comment, and you raise a great point that I wish you could have expanded upon further.

I'm obviously a laissez faire capitalist, who would define regulation using your exact words: intervention & manipulation.

---"REGULATION" defined by WIKI -
Regulation mandated by a state attempts to produce outcomes which might not otherwise occur, produce or prevent outcomes in different places to what might otherwise occur, or prevent outcomes in different timescales than would otherwise occur.---

To do anything that would prevent what otherwise might occur can be nothing but manipulation. If what otherwise would have happened without regulation was doomed to failure, let it. It was a bad idea.

To champion freedom as our country does... while moving in the direct opposite direction is very confusing to me.

I live outside Chicago, and I am certainly not free.
Compared to other countries, I am certainly "more free". However, I don't seek to be more free then others. I seek to be free.

*I cannot "own" a bar and allow my patrons to smoke or I will be regulated. Therefore, I cannot OWN a bar.
*I cannot "own" a house without being forced to pay for schools I will never attend or will never approve of. Therefore, I can never OWN a house.
*I cannot "own" a car without paying the proper political officials their annual dues. Therefore, I can never OWN a car.
*I cannot choose to drive down an empty road on my own property which I "own", and elect to not wear my seat-belt or I risk being regulated. Therefore, I can never OWN myself.
*In the case that I created my own self-sufficient plot of land -- providing it's own electricity, water, food, and never ventured off of it for 50 years......men with guns would eventually come and demand 20% of all of my assets, "for the good of the people". Therefore, I can never OWN my life.
*I cannot purchase Mustard Oil for cooking, because Corn Oil lobbyists have "regulated" the market. Therefore, I am not free to choose what I eat.

Education is a perfect example of a regulated "market" gone bad. You cannot "force" education on anyone. They have to want it. Americans are poorly educated in public schools? Yes, I would think everybody agrees on that.

Should I send my six year old to a public school system -- she will be swearing allegiance to a flag first thing every morning. It will be the first thing she does everyday. A six year old, pledging allegiance to something she knows nothing about. It will scar her for the rest of her life.

For me, part of the generation that has been provided with the tools to view world history through an objective lens for the first time....the phrase "land of the free" is falling on deaf ears.

Regulation and big government has been proved to fail 100% of the time, every time, in every country. Short term gains with long-term losses that always need to be fixed again.

The most popular rip on a laissez faire capitalist is that we don't care about anybody else, and we are selfish. It's the direct opposite. We care passionately about other people — that's why we pursue the best ideas for mankind. And freedom is the best idea we have ever had.

To support any anti-freedom mandates within any market, is a step in the wrong direction towards a more profitable and enjoyable society.

The libertarian argument is often the most tortured.

Phil demonstrated that.

The foundational flaw of libertarianism as an ideology is that it is based in economics at the exclusion of disciplines, and that libertarians read so much into economics that it becomes a dogma.

In that light, libertarianism is a theological, not ideological, movement.

So, Phil, only state manipulation is wrong. Only state anything is wrong.

The current financial crisis happened not because of The State desiring an outcome or picking a winner. It happened because The State let opportunists have everything what they want without asking for anything in return.

Let me just end with a link to a very interesting — an thoroughly devastating — critique on libertarianism at Zompist. It's just an essay by a writer, not a political scientist, yet it captures the essence of libertarianism's flaw. It's titled, appropriately, "What's wrong with libertarianism."

I was a Libertarian in my misspent youth (ran for office twice as one, knew Ed Clarke and Murray Rothbard), so I have a little empathy.

I find it very interesting that Libertarians just don't get the fact that corporations are creatures of the state. Talk about intervention — they are given enormous special privileges in the areas of liability and taxation, and are recognized as "persons" with rights of free speech. They whine about the regulation of a "free" market that does not exist, and remain silent on the egregious inequality of corporations under the law.

This discussion began because of the failure of two gigantic Federal creations, I'm not quite sure where any libertarian opportunists have played a part.

Were Fannie & Freddie established by the Federal Government? Was the Federal Reserve established by the Federal Government? Is there a Capital Gains Tax?

I believe "force" is wrong, state or non-state — and that certainly includes manipulation. The state's only job is to prevent "force", by being the only source of legal "force" within society. That does encompass and require a relatively large government in place.

You see the current debacle as an error of the opportunists and a black-eye for the "free market".

However, the "free market" shouldn't get a black-eye unless it has actually taken part in the fight.

No disciplines within libertarianism? There's a HUGE discipline. Liberty is the freedom to act or believe without being stopped by unnecessary force. In order to do that, you must have the discipline to accept failure & reality. I do not see this discipline anywhere within our state controlled markets. Failure hits, we bail them out. Reality hits, our papers blare out false hopes of optimism. (lies)

I absolutely understand that corporations are creatures of the state. The only way to "be" a corporation is via blessings from the state which 'merely' require an annual "due".

I am staunchly anti-corporation. I believe our education should steer towards independence; working towards a society that educates our children to work for themselves, think for themselves, and become self-sufficient. The marks of a truly successful nation.

Instead of waving a flag at 9 am every morning when they turn six years old — our children should be working towards learning about the basics of creating energy, food, & shelter for themselves. Instead of hearing tall-tales of revolutions, wooden teeth, and "just" wars... our children should seek objective thought and the ability to speak truth to power. The only way to provide such an education is through the private market, which has been demonstrated.

After a few generations of students within an objective educational system — corporations would vanish from society as remnants of our former state-controlled economy. As no objective thinker with the ability to be self-sufficient could ever accept working for another human being. It is not healthy and it is not human. Let it be the last we see of slavery.

And I would just like to highlight a major problem so many Americans share. While I have used myself the primitive labels such as "libertarian" and "laissez faire" to describe myself — they don't do me justice. Because I guarantee there is only one Phil. Nobody else shares my exact beliefs. These 20th century limitations and labels are the exact reason we are currently divided and conquered. But I too am a product of a state-school, and therefore have a fairly limited vocabulary. (not directed at either of you, just making a funny)

Phil, I wasn't clear in my original statement with regards to using the term "discipline". I meant in the sense of intellectual disciplines. How does the economics discipline reconcile itself with the natural sciences, and how does economics reconcile with the social disciplines ("soft sciences" and theology)?

Libertarianism has strong economic underpinnings, but somewhere along the way economics also formed moral underpinnings very similar to religious beliefs.

Economics is both "this is the way things are" and "this is the way things must be".

So libertarianism somehow became economic Calvinism.

Here's an analogy: You used the phrase "the free market", as in ... "the "free market" shouldn't get a black-eye unless it has actually taken part in the fight."

Look at "the free market" word by word.

"The" implies an unequivocal singularity. It can be something everyday as "the flower pot on the windowsill." It is also something as cosmic as the monotheistic deity.

Modern economics, which wants the respect of being treated as a hard science, also holds out a monotheistic being that is both all-powerful and yet benevolent if we mortals heed its word.

Modern Western capitalism does not equal economics. Throughout time and space, there are and were many different systems in use to allocate resources.

So there are many markets, each subject to its own rules and customs. Freedom varies considerably. And since there's so many systems in place, there can be no "the".

"Free" is a very nebulous word, which can mean different things to different people. First, we must find a definition we can agree upon.

How's this: the voluntary participation of an actor without coercion to the body or possessions.

In other words, one party cannot use the threat of force or sabotage as leverage over another.

This is where interdisciplinary blinders hamstrings libertarianism. Look at the other party through history, anthropology, sociology, theology, or a mixture of any or all of these disciplines. This would give you a better idea of why the other party might not want to even trade with you, or conditions to trade are very ornery.

There's a basic human desire to be free from physical pain imposed on oneself. However, there is no consensus that the way to avoid this is to hold elections, or even to have no state at all.

If you are to look at the world population today, and of human civilization throughout history, you'll see that our understanding of "freedom" is the deviation from the norm, not the standard.

So there goes "free".

Finally, "market" is a theoretical or real construct where exchange and value take place.

An economic dogma holds that all goods and services must 1. be assigned a value and 2. must get the maximum possible benefit from that value. But how does a market reconcile a system where the above conditions are not met? How can a market approach, say, a commune, where all goods are shared according to a set of rules rather than by an exchange mechanism. Or, how can a market cope with the fact that a primitive society is sitting up a large potential of wealth that it is willing to leave fallow, because it does not want to go along with a transformational change?

So even in many business transactions, markets experience friction — in some cases, a market outlet doesn't exist.

There's no "the," there's not always a "free" and there are other mechanisms of allocation other than a "market" framework.

"The" "free" "market" does not exist. QED.

That was some outstanding thought. And using the term "the free market" in that text without defining it was a poor choice on my part.

There is not 'one' free market that everybody can agree upon, and there certainly is not 'The' one anywhere. I can't really disagree with much you said. The World is simply not yet capable for a Free Market.

Albeit in the distant future, I do hope we find something as you described it. Any parties engaging in the use or threat of force or sabotage as leverage over another would be prosecuted. Of course, that would be ideal, but it's where I had hoped to live.

Regarding any economic dogmas however, I'd throw them out. Assigning values is a place I don't think we should have gone. Sure, very convenient and organized... but who assigns the value? I believe the day values were assigned, is the day The State was born. For, it got to hand out the rocks which they said were valuable. So, throw out the rocks.

The barter system never failed. Sure, an elaborate division of labour would be unthinkable without money. So would world wars. The State destroyed the barter system and setup an elaborate division of labour. To barter is to do fair trade in my eyes.

It's been argued the barter system gave way because our wants had become so wide that it became impossible to fulfill them with direct exchange. I would disagree. The destruction of the barter system is the precise reason nations experience depressions, turmoil, and greed. It's also the reason community and self-worth have taken such a hit since The State has appeared.

If one cannot fulfill their wants through direct exchange, their value, how are they to do it without bankrupting themselves using money? One cannot live beyond their means. Bartering is the only guarantee they won't.

What about the disabled or those that cannot provide for themselves? The only way to guarantee that those that care for them will gain their own maximum value, their own maximum worth, is through the barter system. So I believe that's the best way to ensure those that cannot provide for themselves are cared for. Imagine the Philanthropists of the world given their maximum value, and the things they could do.

Rocks are the main difference between people from country to country. Different languages, different customs, different visions, different sports, different meals, different people... exist everywhere, every nation, every land. But there are very specific rocks in very specific places, all with specific values assigned.

Through these rocks, come filtered versions of history, anthropology, sociology, and theology.

Economic Calvinist? Well, in my country Economic Calvinist make up 99% of the population. You might be one, we didn't really have a choice in the matter. We all have a firm economic principal in common which binds us together, and rules over all things. Personally, I don't think it's healthy and hasn't done much for us. But it goes something like this: "I am an American, and I believe in the green rocks."