Btw the market technique you described is not bad and results in better prices for consumer and more competition. Rockfellers were losing their monopoly by the time they were broken up.
Wtf are you smoking. All those things should be set by the market. When government adds liquidity to the market it forces out investors out of the market.Glass-Steagal did a number of things. One was create the fed discount window. This is a good thing. This allows the government to steer monetary policy and create liquidity in the markets.
Fed discount window means that FED can lend at ultra low interest rates to the banks resulting in devaluation of the currency. You got to be fucking kidding me if you think that is good.
Um yeah recession needs high interest rates. This means that all the capital needs to go to bussiness so they can start producing. What they are trying to do now is take credit away from sectors of economy that badly need it and give it to consumers. Broke consumers at that. Look you need to learn economics.Without the feds current ability to keep interest rates low companies, commercial banks would be doing the stuff like you currently see with credit cards like providing cards for 28% interest in a down economy (FYI< Usury used to be illegal).
No what it does it distorts market operations. Companies act based on interest rates. When interest rates are low the companies are investing capital and are expanding. When they are high companies save money and liquidate bad assets.However, the fed setting rates is does not solve everything. It allows somewhat ordered chaos when corporation are behaving sanely.
When you keep interest rates artificially low for 30 years you get very little liquidation of bad assets and the productivity of the economy slows down. Not to mention when government burrows a fuckton of money to bailout the bad assets of the economy it destroys the entire foundation. We keep pushing back the enevitable correction. Everytime we push it back it becomes much worse.
Deposit rules merged investment banking with deposit banking. It bassically destroyed the entire concept of a bank. FDIC is a moral hazzard. Before FDIC people reserached their banks before making deposits. Now the speculator banks get the most depositors. As you can see that is disastrous.Other things Glass-Steagal did are:
- Add deposit rules for banks
- Establish the FDIC to stop bank "runs"
- Separate commercial banks from speculatory investment banks
With deposit rules there is no difference between comercial and speculatory investment banking. Both use deposits for investment.
I don't know if you know this but speculation on the market does not reflect on how the economy works. A companies stock can be devastated but if it is making profit it will continue to function and work just fine.Other important regulations of the period were the establishment of the uptick rule. The Uptick rule was extremely important as the robber Barron's buy and sell large volumes to drive prices artificially up and down. Since the elimination of the uptick rule we now see wide fluctuations due to speculation in the markets (energy is one of the biggest areas we see speculation).
There is no one to blame but the speculators if they bid up stocks. Why should we protect failures?
Your robber barrons comment has nothing to do with the uptick rule.
LOL government is the biggest polluter. Comapred to the pollution done by our industry the government contributes several times more. And they give themselves sovereign immunity which prevents the people making decisions from answering to the law.You really need to understand what happens in an environment where there are no regulations. You can't get any better example than the 1920's. The era of Ponzi and the robber Baron's.
LOL where do you read such propaganda? Our boom bust cycle has been bigger since the introductions of these rules. They simply pushed back the real lows until the future.Sadly enough the regulations which came out of the great depression were very even handed and sane. These laws have what engineers call a "dampening effect" on the economy. This does not mean the grows "slower" it means there are lower high and higher lows. It allows the economy to grow in a more more stable manner. These laws allows the US to grow with relatively few mild recessions until the 90's when they were repealed.
When government practices a ponzy scheme it self I don't think it is unrealistic to think that other people would think they can also do so. Plus ponzy schemes are easy to detect the people who give their money to defrauders are to blame. If anything none of the rules that were used for deregulation address the ponzy schemes.The current crises can be linked directly to removal of many of the reforms of the 30's. We have seen a massive resurgence of ponzi schemes (Eclipsing the great Ponzi himself). We see Enron's, AIG's, and others who are now (through laws enacted in the 90s) completely exempt from regulation.
You are a funny guy. You mention all the rules that were patches for government created problems. None of those rules actually stopped the problems they just pushed them back.
- Rules on margin requirements? gone
- Rules governing "hedges" as insurance? Gone
- Rules allowing oversight of derivative as securities? expemt
- Rules governing margin requirements? gone
With each repeal of these laws we have seen worse and worse recessions occurring more often.
Unfortunately I don't see any of the old rules which worked so well being replaced.
Read your history. It is there. Don't just read a single book and take some partisan spin on it.
For examples rules on the margin requirement only hurt the speculators. People who invest their money are not effected. The others all have something to do with trying to regulate speculators.
What you also do not understand is that the markets regulate them selves. If the government fails miserably to control derivatives the market would not do so. Derivatives are only possible to grow this big with FED discount window. What they do they burrow at an ultra low rate and use that burrow money as a hedge. If they were forced to burrow from someone else they would not be able to get a good rate and would not make any money.