Here’s an idea for the regulation of the financial industry:
How about if we do more good regulation and less bad regulation?
And anyone who frames the issue as regulation vs deregulation is disqualified from the discussion.
Sep 242008
Regulation
Sep 232008
John Sununu et al point to AIG and say insurance regulation should be a federal function, not a state function with 50 different regulators.
OK, here’s a question. I understand that AIG sells two types of policy. One is insurance, which falls under 50 different state jurisdictions. The other is classified as securities, and is regulated by the feds.
Which one of these is the cause for its financial difficulties?
This is not a rhetorical question. The Sununu article does not answer it.
A late edit: This article from the New York Times suggests, but does not tell us for sure, that it’s the securities business at AIG that caused all the trouble.
Apr 122008
The usually reliable Wall Street Journal editorial page seems to be carrying water for Comcast in the net neutrality issue. I could agree that there are problems with some versions of the net neutrality rhetoric, but that’s not what the WSJ discusses. Instead it defends Comcast’s behavior wrt its throttling of BitTorrent, saying it comes under the terms of “reasonable network management techniques.” But if what Comcast was doing was reasonable management, why did it lie about about what it was doing and what it was selling to its customers? (I’m still irritated about the way it lied to me and to others of its customers about what it was doing wrt blocking port 25.)
In addition to defending Comcast, the WSJ attacks Google. But if the WSJ wants to attack Google on net neutrality, maybe it would do better to point out that Google itself has been far from neutral in carrying traffic. It blocks traffic on behalf of the Chinese government, and at home it refuses to sell pro-life ads that have a religious connection. Just as Comcast did, it tells lies about what it’s doing, saying it doesn’t sell ads that mix “abortion and religion-related content.” But the Christian Institute, which is suing Google, points out that that’s not true at all. It sells pro-abortion ads that have religion-related content. It’s only the so-called “pro-life” side that it censors.
Net neutrality, indeed.
Apr 052008
I am told (over at SCSU Scholars) that Hillary Clinton was talking about the minimum wage on Jay Leno. She claims a boy told about her mother. The minimum wage was raised, then her hours were cut, so she isn’t making any more money. Hillary says we need to fix that.
I agree, and am willing to join her in that fight. Here are some ways:
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Cut business taxes so businesses will have more money to pay those higher wages (which they won’t do willingly, of course, but will do when competition forces them to do so).
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Cut individual income taxes so people will have more money to pay the costs that businesses attempt to pass on to consumers.
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Vote price-controlling politicians out of office this fall.
Apr 052008
There’s a lot not to like about Henry Paulson’s plan for a federal powergrab for the financial services industry, but here’s one I hope people will be thinking about:
The proposals include calls for a federal insurance charter that would allow big insurers — which are currently regulated by the states — to more easily operate nationally.
In other words, this would let the bigger insurers squeeze out the smaller ones, creating monster corporations that will be too big to be allowed to fail, and which will therefore be eligible for federal bailouts.
Apr 022008
I learned about the “Light Bulb Freedom of Choice Act” from townhall.com writer Johnnie B Byrd. I like it, and I like the new compact fluorescent bulbs. We’ve started using them a lot at home because of the economics. But it seems that Congress is scared to death that people will find out that markets can work, so found it necessary to make them mandatory.
Until now I had not ever heard of Michele Bachman, U.S. Representative from Minnesota’s 6th district, who proposed this measure. From reading the wikipedia article about her I see a few things that make me nervous, but anyone who can propose a law like this can’t be all bad.
And to think I used to live in St. Cloud, Minnesota, which is part of her district. When I was living there back in the 70s we had a leftwing Democrat as our congressman. I don’t remember his name, but I remember being told that he had shown up at a manufacturing plant where I was working, to stick his nose in some labor business, and was told by the plant manager to get the hell off of the property. I like living in a country where plant managers can tell members of Congress to do that without having to live in fear of retribution. In this particular case, I actually sympathized somewhat with the unionized workers, but I heartily approved of the plant manager’s action.
Mar 312008
Should an eleven-year-old be allowed to administer his school’s computer network? NetworkWorld article here.
An interesting bunch of comments follow the article, revealing that most NetworkWorld readers who comment on articles probably don’t have the maturity of the average eleven-year-old. Then there are those who say it’s child labor, depriving some adult of a job.
It isn’t, and nobody is openly suggesting the government regulate this, but it’s a great demonstration of the perils of government regulation. How do you possibly make rules to cover the huge variety of human circumstances? You don’t, except by constraining human behavior into narrow categories that don’t comprehend all of reality.
There are lessons here for health care regulation, financial services regulation, you name it.
Mar 302008
What are the consequences when a department messes up in your organization? Does it get more money and greater responsibilities, or does it get trimmed back a little?
It probably depends on whether or not you work for the government. If it’s a government regulatory agency, it gets more. If it’s a business, it gets less.
How else to describe Henry Paulson’s call to consolidate federal financial regulators and give them more power?
It looks like a second coming of Homeland Security. After 9-11 not a single bureaucrat faced consequences for being unlucky enough not to use the information at hand. Instead, the response was to grow the government.
Mar 262008
According to Monday’s Wall Street Journal, big business is now getting on the global warming bandwagon.
… executives from major multinationals are calling on the U.S. government to impose a cap on greenhouse-gas emissions. As Jeffrey Immelt, General Electric Co.’s CEO, explained, because regulation is coming, “I’d just as soon have a seat at that table than have it pushed down my throat.”
In other words, a cap on greenhouse-gas emissions is a recipe for corrupt government. Policies will be made on the basis of who has the best insider connections, rather than on merit. It’ll be a sort of mutual corruption pact between leftwing regulators and big business corporations.
The Main Adversary calls them Green Robber Barons.
A plain carbon tax wouldn’t have all these possibilities for corrupt insider dealing, so I suppose that’s why politicians are pushing for emission caps instead.
(Of course, the way to get a carbon tax is to pay for it with offsetting tax cuts elsewhere. But I suppose that sort of paygo has no chance of getting any support in Congress.)
Mar 072008
Where can I get a George McGovern for President bumper sticker? I didn’t have one on my car back in 1972 (I’m not sure my wife would have approved) but I was a McGovern supporter back then.
Well, mostly I was against Nixon and Watergate, but I was suffering from a bout of leftwingism, too. I got over it in time for the 1976 elections, though suffered some lingering symptoms until Ronald Reagan’s first year in office.
But here is George McGovern at the WSJ, sounding like the type of libertarian-leaning Republican that could make me become a Republican again:
…Under the guise of protecting us from ourselves, the right and the left are becoming ever more aggressive in regulating behavior…
…There’s no question, however, that delinquency and default rates are far too high. But some of this is due to bad investment decisions by real-estate speculators. These losses are not unlike the risks taken every day in the stock market….
…Health-care paternalism creates another problem that’s rarely mentioned: Many people can’t afford the gold-plated health plans that are the only options available in their states.
Buying health insurance on the Internet and across state lines, where less expensive plans may be available, is prohibited by many state insurance commissions. Despite being able to buy car or home insurance with a mouse click, some state governments require their approved plans for purchase or none at all. It’s as if states dictated that you had to buy a Mercedes or no car at all.
Economic paternalism takes its newest form with the campaign against short-term small loans, commonly known as “payday lending.” …
…Anguished at the fact that payday lending isn’t perfect, some people would outlaw the service entirely, or cap fees at such low levels that no lender will provide the service. Anyone who’s familiar with the law of unintended consequences should be able to guess what happens next.
Researchers from the Federal Reserve Bank of New York went one step further and laid the data out: Payday lending bans simply push low-income borrowers into less pleasant options, including increased rates of bankruptcy. Net result: After a lending ban, the consumer has the same amount of debt but fewer ways to manage it.
Since leaving office I’ve written about public policy from a new perspective: outside looking in. I’ve come to realize that protecting freedom of choice in our everyday lives is essential to maintaining a healthy civil society.
Why do we think we are helping adult consumers by taking away their options? We don’t take away cars because we don’t like some people speeding. We allow state lotteries despite knowing some people are betting their grocery money. Everyone is exposed to economic risks of some kind. But we don’t operate mindlessly in trying to smooth out every theoretical wrinkle in life.
The nature of freedom of choice is that some people will misuse their responsibility and hurt themselves in the process. We should do our best to educate them, but without diminishing choice for everyone else.
I’ve been wondering what to do with my vote on election day. Now I think I know. I’ll write in George McGovern’s name!