When and why did America reject regulations that kept speculative banking, corporate monopolies, trusts, etc. in check?
When and why did America reject regulations that kept speculative banking,...
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Reagan. He basically created every problem the US economy and people face domestically today.
What this user said.
Democrats lost Reagans election hard.
So they cozied up with the CEO's to be competitive
Got any sources that go into detail on this?
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.
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.
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.
Libertarianism is a mental defect.
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.
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.
In unregulated market, banks that speculate rip off of people and get away with it. Since there is nothing preventing them from doing anything.
Not an argument.
Trump's administration is the first since then that's trying to shift the balance.
BAHAHAHAHAHA good one, good one.
Trump is supported by the industrialists, though, how is that false?
Reminder that "speculation" just means "investment that I don't like"
Whatever you say, Shlomo
Rich people in America ever having to answer for their crimes
Nice fantasy pleb, that's never gonna happen.
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.
Literally the first thing Trump did in office was remove regulations on financial institutions put in place after the 2007/2008 crash.
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).
because muh free market
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).
Most countries never had an equivalent of Glass-Steagal. The housing bubble was caused by dodgy ratings agencies.
Regulashuns are gud, bree marget bad
A lot of it was actually Nixon, Ford, and Carter.
Really everyone from Nixon to Clinton.
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.
Explain why you think regulations are bad.
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.
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.
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.
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.
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.
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.
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.
What do American conservatives even like about the guy?
He happened to be the man Gorbachev capitulated to.
he's a rich movie star who took guns away from niggers
Nothing anymore, since paleoconservatism is on the ascent
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.
You sound like someone who read Polanyi uncritically
Lolbertarianism strikes again
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.
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.
The line between "legitimate investment" and "speculation" isn't clear
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.
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.
Those Russians gave up their shares quicker than the French gave up their Assignants because they were starving.