Problem is that you don't know what the good regulations is because you don't know their consequences in the long run.

Clinton wanted to allow people to afford and buy a home because he knew for many of them that was the way out. That's why he put out executive orders back in the 90ies under his National Homeownership Strategy where they introduced more flexible underwriting rules.

Among many other things he put out federal orders out and banks were required to allow people with questioble economic abilities to get approved.

So it's not that simple.

Just because a problem is hard doesn't mean we should abandon it. Maybe start with limiting the "instruments" available for <del>gambling</del> investing. Get rid of that one that bets on market volatility, for example (although that problem kind of solved itself as the investors in it lost their money).

I don't remember to have said anything about us abandoning it. On the contrary, my point is that we should, in fact, try to understand it so we can do something about it instead of just pointing fingers at people in the very system that supports them.

The other way to mitigate it is to incentivize some of the players in the system to ferret out and report wrongdoing on the part of other players. Think of short-sellers in a market: they can profit handsomely by identifying fraud or irrational exuberance, taking a position opposite it, and then loudly reporting the fraud so everyone knows about it. The legal system is also setup like this, as is the U.S. government: there's no one entity that regulates the U.S. government, but the government itself consists of a set of interlocking institutions, each of which has leverage to prevent the others from becoming too powerful.

Now that's an interesting idea. I wonder if it could work in practice? If (a) fraud is obvious enough to invite this; (b) most fraud as such; and (c) the long-term downside to fraud is way worse than the upside?

> there's no one entity that regulates the U.S. government

Well, in theory the voters do.

Hence checks & balances. It's a different sort of regulation than the grandparent was talking about, though - voters don't get to directly tell the government "You can do this and this, but you can't do this", they just get to vote the people who make up the government out if they start doing unpopular stuff.

I think most people are fine with regulations when they feel they're evenly applied, or that it's unlikely their competitors will be able to break them without consequence. It's when they feel that regulations will affect them more than others or that their competitors will be able to ignore them while they won't that people start getting loud.