| reply to Px
Re: I got a better idea That's the thing about regulation. It invites you to study it so that you can find your way around it. There are ALWAYS unintended consequences with regulations. The other problem with it is when you discover (in some of the cases only) that the cure was worse than the disease, you repeal the regulations, and instantly it appears that you're inviting everyone to do the thing that you originally tried to make them not do... now THAT is exactly what happened on wall street. Way back, someone decided that it was a good idea to close the ability of companies to be leveraged more than some arbitrary number (Capital to debt ratio) say it's 15/1. Then they came along with 'degregulation' which actually only opened up that loophole for 5 specific companies (far from runaway free market capitalism.) If you're working at one of those companies, or worse a lawyer for one of them, what do you do the very second they lift a regulation? You get to figuring out how you can exploit it. So they did. If this hole hadn't been 'plugged' to begin with, companies that were over leveraged would have just failed flat out if they made bad bets. But when the government decided to repeal the regulation they already made, it was apparently a stamp of approval for the behavior, that obviously didn't turn out to be a good idea. |
