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The regulations were implemented in the first place because markets proved with the '29 Crash that they couldn't prevent this type of fraud on their own.  Beginning with Reagan and carrying on through Bush I, Clinton, and Bush II, though, the US government let the markets run loose again and expressly kept its hands off of hedge funds and the CDS markets.  So underlying the regulatory failure was a market failure that had been identified before my parents were born and that had not been cured by the passing of a half-century.  Deregulating the markets had the same effect as taking a schizophrenic off his meds (And for every John Nash, there are thousands stumbling down the street yelling at the invisible.  Did we really want to play those odds with the world's economy?).  This is a fact that needs rammed up every neolib/neocon's nose so that we don't forget again and in another half-century listen to another Milton Friedman peddle Kool-Aid.
by rifek on Mon Mar 23rd, 2009 at 08:43:28 AM EST
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