The assertion to which I’m replying is: “Deregulation never seems to result in more competition, just more consolidation and more and more powerful companies with increased lobbying powers and personal connections to top government officials.” That is clearly untrue.
To use financial deregulation as an example. Yes, the 2008 crisis was bad. But on the whole, are people still worse off? When my parents bought a house in 1989, their interest rate was multiples higher than I’m paying now. One of the things that caused interest rates to collapse was securitization. Moreover, the boom times of the 1990s was also partly due to the financial system. It was deregulated banks that provided the private capital for the first tech boom. And, this website covers an industry that resists regulation at every turn—its bankrolled by investors largely free of regulations applicable to investors managing retail deposits, and numerous companies stay private to avoid public company regulations. What is the net cost-benefit from financial deregulation over the last 30 years, accounting for both benefits and costs? Pro-regulation folks never look at it in those terms.
There is no doubt that deregulated markets are leas predictable than regulated ones. Regulation can smooth out the boom-bust cycle. Thus looking at busts, instead of long-term trends, is a convenient way for pro-regulation folks to distort the overall impact of deregulatory measures.
> Yes, the 2008 crisis was bad. But on the whole, are people still worse off? When my parents bought a house in 1989, their interest rate was multiples higher than I’m paying now.
In 1980, Congress passed the Depository Institutions Deregulation and Monetary Control Act.
> Moreover, the boom times of the 1990s was also partly due to the financial system.
So surely you remember the tech bubble then and all of the consumer loss. One snippet to jog your memory: "Pets.com stock had fallen from its IPO price of $11 per share in February 2000 to $0.19 the day of its liquidation announcement." [0] I'm sure there were plenty of consumers who bought into that company under false pretenses.
> Thus looking at busts, instead of long-term trends, is a convenient way for pro-regulation folks to distort the overall impact of deregulatory measures.
What about if we flip that around, maybe... Looking at falsely inflated markets, instead of real earnings and growth, is a convenient way for pro-deregulation folks to distort the overall impact of regulatory measures.
Get rich schemes are unfair to the unknowing victim. There are more parallels with many of the questionable financial vehicles and products that turn up when no rules are in place.
Interest rates now are incredibly low because central banks are keeping them low in the aftermath of the 2008 crisis. But the fact that our economies need such incredibly low interest rates to generate growth isn't good at all. What will they do with the next crisis? Go negative?
To use financial deregulation as an example. Yes, the 2008 crisis was bad. But on the whole, are people still worse off? When my parents bought a house in 1989, their interest rate was multiples higher than I’m paying now. One of the things that caused interest rates to collapse was securitization. Moreover, the boom times of the 1990s was also partly due to the financial system. It was deregulated banks that provided the private capital for the first tech boom. And, this website covers an industry that resists regulation at every turn—its bankrolled by investors largely free of regulations applicable to investors managing retail deposits, and numerous companies stay private to avoid public company regulations. What is the net cost-benefit from financial deregulation over the last 30 years, accounting for both benefits and costs? Pro-regulation folks never look at it in those terms.
There is no doubt that deregulated markets are leas predictable than regulated ones. Regulation can smooth out the boom-bust cycle. Thus looking at busts, instead of long-term trends, is a convenient way for pro-regulation folks to distort the overall impact of deregulatory measures.