Does new or re-regulation make sense at this point in time? (aka Sarkozy is a dumb-ass)

[Kurt_and_Hunter]

Sarkozy's call for new global regulatory oversight rather than strategic reflation is tres nuts, IMO. It reminds me of John McCain's budget-freeze idea... a proposal so wrong for its moment in time as to be dumbfounding. And that goes for most current domestic calls for regulation.

True, people are pissed off so new regulation is politically easy, particularly when sold as regulation that would have prevented our current problems.

But there is no force on Earth that could recreate the origins of our current problems in our current environment. There is not going to be a new bubble in anything (except maybe canned food and ammo) for a long, long time. Nobody is going to be going hog-wild on derivatives anytime soon.

There is no current need for regulations that would have prevented this mess.

Closing the barn door after the horse has gotten out is doubly foolish. Not only is it a waste of effort, it also prevents the horse from returning to the barn.

I find a war on speculative excess in an economy that's rolling off a cliff to be counter-productive. There is nothing to restrain! For instance, banks making risky loans... we are in a credit crisis precisely because banks are NOT making risky loans, and without being told. The banks have unilaterally tightened their lending standards to more stringent levels than any regulator has dreamt of.

Is this really a time to tighten up home purchasing practices, when housing is in free-fall? If anybody wants to get creative about getting a house of the market then get creative!

Does it make sense to tighten bank reserve ratios at a time the banks are piling up reserves rather than lending?

Do we need tougher merger oversight in an environment where the only big merger in sight is a Chrysler/Fiat merger that we ordered?

Fighting... the... last... war.

God knows we should have done things differently in 1996, 1999, 2001 and 2004. It does not, however, follow that what would have been the right thing in 1998 would be beneficial in 2009.

______

And the kicker, added on edit for the snarky idiots who are already posting thoughtless "you are going against my wholly ill-considered dogmatic reactions" replies...

Most current calls for regulation are spasms, not responses to real-world exigencies. What do you people even think you are going to regulate? Nobody on Earth has the faintest idea what the financial world will look like in 24 months so you are talking about regulating FANTASIES. Anybody who says, "This here is a good regulation of the financial system" should, at minimum, be able to describe the financial system it is intended to regulate. Which nobody can.

It's unreal... being pro-regulation or anti-regulation is, as an abstract stance, idiotic. It's like being pro or anti rain devoid of any context. Sometimes rain is needed. Sometimes rain is terrible.

[elleng]

1. You are wrong.

Details later.

[Schema Thing]

2. No reason not to get regulation right, right now.

In fact now is the time to do it in a fashion that recognizes the global nature of finance.

[Jim Sagle]

3. Most cretinous post I've ever seen.

[BzaDem]

4. K & R.

As Krugman says, if a car runs over someone, the solution is not to run over them again in reverse. The solution to a crisis created from too much debt is NOT to focus solely on paying down that debt, and the immediate solution to a crisis created from too much regulation is not solely to increase regulation. This needs to be done well before we come out of this, and I don't doubt that we will, but not now at the expense of policies that will end the immediate crisis. If the G20 fails, Sarkozy will be remembered as the one who caused it to fail by fighting the wrong battle at the wrong time.

K & R.

[BzaDem]

5. K & R.

As Krugman says, if a car runs over someone, the solution is not to run over them again in reverse. The solution to a crisis created from too much debt is NOT to focus solely on paying down that debt, and the immediate solution to a crisis created from too much regulation is not solely to increase regulation. This needs to be done well before we come out of this, and I don't doubt that we will, but not now at the expense of policies that will end the immediate crisis. If the G20 fails, Sarkozy will be remembered as the one who caused it to fail by fighting the wrong battle at the wrong time.

K & R.