Link: Seven Deadly Sins of Deregulation
Robert Kutner of The American Prospect published an article entitled “The Seven Deadly Sins of Deregulation and Three Necessary Reforms” that I wanted to highlight for some background information on a possible explanation of the economic situation we’re experiencing.
Kutner writes:
“The current carnage on Wall Street, with dire spillover effects on Main Street, is the result of a failed ideology — the idea that financial markets could regulate themselves.”
He outlines his “Seven Sins” and explains them further.
Sin One: Allowing Mortgage Lending to Become a Casino.
Sin Two: Allowing Unregulated Bond Rating Agencies to Decide What was Safe.
Sin Three: Failing to Police Sub-prime.
Sin Four: Failure to Stop Excess Leverage.
Sin Five: Failure to Police Conflicts of Interest.
Sin Six: Failing to Regulate Hedge Funds and Private Equity.
Sin Seven: Repeal of the Glass-Steagall Act.
The full article addresses these ‘sins’ in full detail.
Keep your wits about you and learn as much as you can from what’s happening.
It’s up to everyone who either agrees or disagrees with the FED’s action to consult their representatives up for election and vote accordingly to your position on the events of the Bear/JPM backstop,AIG bailout, short sell restrictions, the proposed RTC-like bailout.
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