Can someone point me to article that analyses how regulation caused the crises/recession? That where it not for this regulation the toxic derivatives would not have been created?
See here for a massive compilation of material on the current global recession: http://mises.org/daily/3128
This is my personal favorite: http://mises.org/daily/3165
Many thanks for these links!
Although technically they are always right when they say more regulation will fix X. More regulation would stop banks from lending out too much cash if you placed a legal limit on how much cash they were allowed to lend out…
The real problem isn’t (lack of) regulation, because the free market would regulate itself. For example, uL is a private company that certifies electronics for safe use. No one will stock your electronics if it doesn’t pass uL regulations.
The problem with government regulations is that they have no incentive to pass good ones. If the government were any good at regulating nothing bad would ever happen but it does so its not.
Don’t let them hijack this ground from you! When people say regulation they always mean more government. You immediately need to point out that government is not the only entity that can regulate. At this point, you can move onto a comparison of incentives between gov and the free market for regulation.
I look at it this way:
Setting an interest rate at 0% (or -3%) creates an enormous pressure of money into the system. At those rates you have built-in profit and not borrowing is stupid. Whatever the regulatory road blocks in the way, the pressure is adequate to take the dirt side-roads around them or even construct a brand new highway. Regulating that sort of pressure is like trying to put your hand in front of a gushing fire hydrant. Without that pressure of free unlimited money, none of this would be a problem.