Elizabeth Warren elected, a crushing defeat for big banks?

Jack21222

The United States is an interesting case, because our "moderate Republicans" would be "extreme right wing" in most of Europe, while our "extreme left wing" would be Europe's moderate left wing. Warren wants to regulate the bankers, not seize their assets and nationalize them.

mheslep

Regulation without bound can amount to the same thing.

ParticleGrl

I reject your premise- Warren isn't "an extreme left wing." Yes, her academic work has suggested that banks have committed some abuses, but seriously- after the 2008 meltdown I think even many conservatives would agree that abuses happened.

mheslep

I'd agree that abuses occurred ... mainly by government, the Fed, government pseudo banks such as Freddie and Fannie, and on the part of the government regulators who, after failing to be effective previously, Warren and others would now reward by multiplying their numbers and powers.

Jack21222

Lol! That's like blaming the police for not preventing a murder rather than the murderer.

Jimmy Snyder

Regulation without bound would amount to murdering bankers and their families. Has someone proposed regulation without bound?

How would multiplying their numbers and powers reward them? Wouldn't a pay increase be more effective?

mheslep

Maybe, depending on the regulator. Much, much more likely in my view would be bankers kept healthy and made toadies of regulators and their political masters, i.e. all made one indistinguishable mass, which was my original point.

Nope. But infinite regulation is not required, is it, just galloping increases to achieve an effect similar to nationalizing a bank.

No. Not in government, at least per my reading and interaction with it. Higher government salaries attract attention and make easy political targets.

So instead the game is the control as much power as possible. I've met several government program managers proud not of their performance but that their program size has only increased. This is an immediate reward in itself, but the power can be and is readily monetized by simply moving from government to the private sector (and back again) where colossal salaries or book advances are offered for connections that can avoid Sauron's eye, or direct it instead on a competitor. Or, power is monetized by simply prompting political contributions.

I went on above not to suggest complete laissez faire when it comes to banks and securities firms, but to draw attention equal or more attention to government's flaws. My plan would be to break up the banks so that any one or dozen failures would non-catastrophic for the country, and then to otherwise leave them be.

mheslep

Do you not see *any* downside to more regulation? Even police chiefs are fired occasionally for bad outcomes. Not so federal regulators.

Jimmy Snyder

In that case, your argument is an example of a logical fallacy known as 'slippery slope'. For example someone argues that it is good to drink water and the counterargument is that if you drank eight ounces of water a minute 24/7 you would die of it. You see how the counterargument is more of a way of avoiding the question than discussing it. I see your comments concerning regulation without bound as a similar dodge of the real question of regulation with bound.

Jack21222

What kind of question is this? Has anybody EVER said, in this thread or elsewhere, that there is NO downside to more regulation?

mheslep

This has gone far from the original point, counter point, which was

Point: "Warren wants to regulate the bankers, not seize their assets and nationalize them"
Counter Point: "Regulation without bound can amount to the same thing."

Or in terms of your water example above, with some context matching the regulation/nationalization points:
Point: Drinking water is perfectly safe (made by someone already guzzling a great deal of water)
Counter Point: Well hold on, drinking eight ounces of water a minute 24/7 will kill you.

Given that banking was already a very heavily regulated industry before Dodd Frank or Sen. Warren, I think pointing out the dangers of extremes is not unwarranted, and not a slippery slope argument.

I used to the phrase "without bound" to quickly show that somewhere regulation and nationalization are easily seen as equivalent. I could have said that "at some point regulation can ...", and determining that point is complicated and subjective and not that useful. More important was to shake the implied absolute claim that nationalization and regulation and always and everywhere two unrelated things regardless of the amount of regulation.

Jimmy Snyder

These are not comparable unless the original had said regulation is perfectly safe. Your post #19 is a textbook example of a slippery slope fallacy.

mheslep

I don't see it that way, but I'll rephrase nonetheless:

Regulation of a bank at some point could become indistinguishable in effect from nationalizing a bank.

Jack21222

But nobody's proposing anything remotely that far, particularly not Elizabeth Warren, so why are you bringing this up? Just trying to derail the thread in hopes of getting it closed or something?

AlephZero

Maybe we are "divided by a common language" here, but in the UK "nationalizing" would mean all the assets and liabilities of the bank being taken into government ownership, as with Northern Rock in the UK in 2008. But that had nothing to do with regulation per se, and in fact Northern Rock has been sold back into the private banking sector (as part of the Virgin group). The primary objective was to protect retail customer confidence and stop a run on the bank, not "regulation".

turbo

One regulation that I would dearly love to see: Banks must maintain capital reserves in excess of their speculations. If their bets turn bad, it should not fall to the US taxpayers to bail them out (again!). The big banks are great at privatizing profits while socializing losses. I hope Warren and other members of the banking committee make this a top priority.

lisab

Which could be said about anything...it's the slippery slope argument, quite plainly. And it's no reason to not regulate banks, IMO.