When and why did America reject regulations that kept speculative banking,...

Boy_vs_Girl
Boy_vs_Girl

When and why did America reject regulations that kept speculative banking, corporate monopolies, trusts, etc. in check?

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haveahappyday
haveahappyday

Reagan. He basically created every problem the US economy and people face domestically today.

Burnblaze
Burnblaze

What this user said.
Democrats lost Reagans election hard.
So they cozied up with the CEO's to be competitive

Crazy_Nice
Crazy_Nice

Got any sources that go into detail on this?

viagrandad
viagrandad

Robert Reich's documentaries and books are a really great intro to this and the general increase in inequality and how government failure to enforce and create regulations lead to it.

Thomas Frank's "Listen, Liberal" provides an excellent view from a political lens on how/why the Democratic Party let that happen.

Neither of those are super hard regulatory looks at Glass-Steagall specifically though.

5mileys
5mileys

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Deadlyinx
Deadlyinx

Regulations aren’t a good thing. In an actual free and unregulated market, the banks that speculated poorly would just fail instead of being bailed out by the government.

Inmate
Inmate

They did get bailed out though. Eliminating Glass Steagal came during the Clinton administration, and it ensured that government would socialize big bank losses. Not to say that Reagan didn't contribute to this, the 1986 tax law gave us the S&L disaster, and bailing out Chrysler in the early 80's set the table for government intervention. But G-S elimination was the final blow to the US and we still haven't fixed that travesty.

Methshot
Methshot

Libertarianism is a mental defect.

Skullbone
Skullbone

I would actually be willing to go completely unregulated if the penalty were crashing the economy were higher. You can do whatever you want but if you cause another crash like 2007, you go up against the wall.

iluvmen
iluvmen

Because industrial capital and financial capital are fundamentally at odds with each other.

The USA as a nation state is represented by its industrial capital. The financial capital which has its base in the US is and has always been globalist/internationalist. The USA's hegemony,(based on its industrial strength), lasted from 1945 to around 1970 (or even mid-60s if you take Kennedy's assassination as the end of US sovereignty). During the 70s and 80s there was a transitional period when financial capital and TNCs started taking over.
The period from 1988 (Black Tuesday as the symbolic date) up to today is the period of the hegemony of Transnational corporations and international financial capital.

America rejected all those regulations because the groups that run it do not have America's interests in mind. They represent global high finance.
Trump's administration is the first since then that's trying to shift the balance.

Fried_Sushi
Fried_Sushi

In unregulated market, banks that speculate rip off of people and get away with it. Since there is nothing preventing them from doing anything.

Harmless_Venom
Harmless_Venom

el goblino..

Need_TLC
Need_TLC

Not an argument.

MPmaster
MPmaster

Trump's administration is the first since then that's trying to shift the balance.
BAHAHAHAHAHA good one, good one.

5mileys
5mileys

Trump is supported by the industrialists, though, how is that false?

VisualMaster
VisualMaster

Reminder that "speculation" just means "investment that I don't like"

Raving_Cute
Raving_Cute

Whatever you say, Shlomo

MPmaster
MPmaster

Rich people in America ever having to answer for their crimes
Nice fantasy pleb, that's never gonna happen.

iluvmen
iluvmen

Trump's administration is the first since then that's trying to shift the balance
I honestly wish this was the case. All he's doing is putting up a front while dividing as many government sectors and financial assets up as he can while in office and giving it to his family, his people and himself.

Methnerd
Methnerd

Literally the first thing Trump did in office was remove regulations on financial institutions put in place after the 2007/2008 crash.

Raving_Cute
Raving_Cute

Speculation is inherent to any economic system that features mobile private capital. There is no system of banking regulations that eliminates the vagaries of the business cycle. Glass-Steagall didn't change anything that matters (note how few other countries have anything of the kind, and how little was different when it was in effect).

Booteefool
Booteefool

because muh free market

girlDog
girlDog

Other countries had something similar to Glass Steagal. Canada wasn't hit nearly as hard as the US, for example. You have to separate investment banking (casino gambling) from commercial banking (everybody else).

Poker_Star
Poker_Star

Most countries never had an equivalent of Glass-Steagal. The housing bubble was caused by dodgy ratings agencies.

Evilember
Evilember

Regulashuns are gud, bree marget bad

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RavySnake
RavySnake

A lot of it was actually Nixon, Ford, and Carter.

Really everyone from Nixon to Clinton.

Nude_Bikergirl
Nude_Bikergirl

The "Free Market" is a late 18th century invention and even then it was never free, because it's a priori impossible to implement one without destroying society.
Free market implies land and labour have to be commodified, but that's irrational and impossible because nature and human beings are not made for the purpose of commodification, nor do they behave like commodities, unlike commercial goods.
The entire history of the free market in the 19th century is a desperate attempt to prevent complete social chaos and collapse by hanging on to the last threads of regulation in the areas of land and labour, while simultaneously trying to get as close as possible to their removal.
The ultimate result was WW1 in the 1910s, economic disaster in the 1920s and political-military crisis in the 1930s and 40s.

Lord_Tryzalot
Lord_Tryzalot

Explain why you think regulations are bad.

Spazyfool
Spazyfool

They constrain the rights of men to make use of the resources at their disposal as they believe is optimal, thus guaranteeing suboptimal economic performance and often outright market failure. Every prosperous society in existence has adopted a laissez-faire approach to economics, which is why the US is currently the richest country in the world.

Need_TLC
Need_TLC

Every prosperous society in existence has adopted a laissez-faire approach to economics

Every prosperous and non-prosperous society in the world until 1800 has had its economic system embedded in its system of traditional social relations, where trade and commerce was not based on competition or gain of capital, but either on barter (for long-distance trade) or on transport of goods from countryside to town (for local trade), and where economic transactions were completely subsumed by custom and culturally dictated expectations for economic behaviour.
In such a system land, labour and currency were not commodities and were not treated as commodities, which is what is required for true laissez-faire economics and a self-regulating market.

They constrain the rights of men to make use of the resources at their disposal

A laissez-faire approach requires the commodification of labour, which means men themselves become resources to be "disposed of" as seen fit by other men. When a man is turned into a commodity, he no longer has the ability or luxury of disposing of any resources, least of all optimally, which implies the complete collapse of economically rational behaviour.

often outright market failure
Again, this assumes the existence of a self-regulating market, which has never existed ever, and never will.

which is why the US is currently the richest country in the world.
The US is the richest country in the world for many reasons, and a laissez-faire approach is obviously not the deciding factor here, although it obviously does contribute, given how commodification of all social relations in a capitalist system boosts the amount of circulating capital and thus wealth. Lots of countries have adopted the laissez-faire approach, but only the US emerged as the world-hegemon in the 20th century.

1992 Russia was pretty laissez-faire: the entire economy was split into equal shares of vouchers and distributed among the whole population.

King_Martha
King_Martha

Steagall had little to do with the housing collapse, it was mostly due to bad loans made because the government insured any mortgage that would be made, so the growth in subprime lending happened. They're continuing this with education by guaranteeing loans no bank would ever make like 250k Loans for an education in sociology.

happy_sad
happy_sad

youtube.com/watch?v=5GoAGuTIbVY

ZeroReborn
ZeroReborn

Yes, but G-S allowed blending those mortgages as investment banking instruments, rather than keeping them discrete as instruments of property. That blending is what wrecked the economy, when those investment instruments failed.

Techpill
Techpill

but that has been going on in Europe for longer than in America with no problem. The problem was incentivizing the making of bad loans in the first place.

Fried_Sushi
Fried_Sushi

You'd have to understand the nature of "derivatives", which are at the root of this. Problem is, they're meant NOT to be understood, they're just tools to extract a bailout when they go bust, which is their whole point, to socialize investment banking losses.

farquit
farquit

based

Bidwell
Bidwell

t. person who watched a documentary about the financial crisis and is now an expert
Derivatives are meant to provide liquidity to the market and reduce exposure to risk. They are absolutely crucial to the financial system. Normal people don’t understand them because it’s inherently a complex system, not because they are not meant to be understood. It makes no difference for financial firms if the general population knows what they are. They only care about what the regulators are going to say.

Sharpcharm
Sharpcharm

What do American conservatives even like about the guy?

Flameblow
Flameblow

He happened to be the man Gorbachev capitulated to.

Skullbone
Skullbone

he's a rich movie star who took guns away from niggers

SomethingNew
SomethingNew

Nothing anymore, since paleoconservatism is on the ascent

TalkBomber
TalkBomber

Glass Steagall is a scapegoat because it was the most recent financial deregulation, the changes to it were minor and unrelated to the breakdown of the financial system.

Harmless_Venom
Harmless_Venom

Super charismatic

Evil_kitten
Evil_kitten

You sound like someone who read Polanyi uncritically

Techpill
Techpill

The Jews

Methshot
Methshot

Lolbertarianism strikes again

Stark_Naked
Stark_Naked

I am aware. On the one hand, I don't think it matters, since I have yet to receive the impression that many people on this board have read him in any capacity, given the level of discussion here so far.
On the other hand, I am interested to see what critical readings the users on this board might offer, for my own edification.

massdebater
massdebater

Although there is one criticism I have for Polanyi: the book's logical structure is total shit, the sentence structure is rambling and self-indulgent, and the book itself could have been written to be twice as short.

WebTool
WebTool

The line between "legitimate investment" and "speculation" isn't clear

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Need_TLC
Need_TLC

The problem with Polanyi is the same as with any other ideologically-driven economic historian; he willingly contorts history to fit his narrative. On a more subjective level, I find that he greatly romanticises the social structures of preindustrial societies (going so far as to actually say "noble savages") and relies on now-debunked canards about the transition from feudal land ownership.

For Polanyi the story of the century between 1840 and 1940 is the story of the "double movement" between the movement towards markets and the self-protection movement against them. The disaster of 1929 he lays at the impossibility of a self-regulating market. The only solution, he writes, is to take the humans and nature out of the market and substitute "planning and control." Which means, of course the rule of people like Polanyi.

lostmypassword
lostmypassword

Fuck glass steagal, why did Obama force banks to inflate the sub-prime bubble by making them loan to people that would normally be rejected for bad credit/inabilitiy to service etc?

Then, why did the government then bail the banks out after their exacerbated the issue with speculation?

A free market and competitive free banking system would have largely prevented this and made sure that people paid for their dodgy decisions, instead we are still suffering today for the bandaid fixes of yesterday.

When the next crash comes and it's bigger than the GFC, will you all like, comment and subscribe to Peter Schiffs 2nd "Peter Schiff was right" video? Will you renounce your statist ways and legit join us on the path to liberty?

If it doesn't happen by 2020 I'll do the opposite and become a full blown marxist neo-liberal keynesian.

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massdebater
massdebater

Those Russians gave up their shares quicker than the French gave up their Assignants because they were starving.

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