Econ4 Discusses Regulation Posted on January 24, 2013 by Yves Smith Econ4, a group of heterodox economists who “believe that the economy should serve the people, the planet, and the future,” has released its latest video, on regulation. Yours truly has a bit part. Their statement on regulation: 0003001 Post navigation ← For Once, Maybe Lying Does Not Pay: DoJ’s Lanny Breuer Resignation Leaked After Frontline Appearance The Garrulous Insolence of Simon Thompson and Anthony Browne → Subscribe to Post Comments 29 comments Aquifer January 24, 2013 at 12:45 am ” … just as food and drug manufacturers must do under FDA rules.” Well, frankly, I, for one, would like regulations a hell of a lot better than FDA rules …. Aquifer January 24, 2013 at 12:46 am But it’s a good video – I like the approach …. :) Yves Smith Post authorJanuary 24, 2013 at 6:57 am The FDA used to be a lot better than it is now. And consider what life was like when the FDA did not do much except worry about adulterated meat: http://www.cultofweird.com/medical/eben-byers-radithor-poisoning/ Aquifer January 25, 2013 at 12:28 am At this point, however, ISTM that the FDA is a poster child for a captured government agency who seems to consider its mission the protection of Big Ag and Big Pharma – not only is it looking the other way re GMOs but it is harassing herbal med providers … http://www.raintreenutrition.com/author.htm I offer this because this is where I used to get the chanca piedra that I use – she battled with the FDA for almost a year (i had occasion to test out one of the claims made for it) the interesting part is that other venders offer similar descriptions of its uses – so why shut her down? I think it was because the amoint of information she was making public threatened Big Pharma, in the sense that 1) it would make it much harder for them to patent any of this stuff and 2) her resources are impressive – it was on the basis of the info i got on her site that i tried the stuff. Methinks she was, as they say, a contender … If the FDA had spent 1/2 as much time testing GMOs as it does harassing herbalists and was really interested in new and better therapies, i would say terrific …. but as it is, methinks your use of the FDA as a model really undermines your case for regulation – anybody familiar with the FDA would snicker when they saw that. Maybe you could pick another agency to bolster the case – Just a thought nonclassical January 24, 2013 at 2:03 am “Choice, or control”, offers fundamentalist propagandist, standing by flag…who ignored his own advice during phony bushbama blue dog healthcare “debate” (no public option)… Clive January 24, 2013 at 4:18 am In the UK there’s a debate right now about how we should leave the EU so as to be able to “free” ourselves from “overbearing” regulation. Cleverly, the Conservative party has wrapped this gutting of employment and environmental protection in good old fashioned jingoistic flag waving. They’ve done everything bar invoking the memory of Sir Winston Churchill… but I might be speaking too soon there. What has framed the debate is therefore an attempted to induce a resonance back to the halcyon days of plucky little Britain, fighting against this impost tyranny of those funny foreigners with their deviant customs and odd food. This does alas still work with a section of the population. What is lacking is a clear explanation of which, precisely, of these “growth strangling regulations” should be quashed. I hope that when people find out the proposal is to reduce corporate liability towards labor, lessen corporate social responsibility and give huge get outs for product liability then people will start putting two and two together. I do worry though that the argument will be lost in a sea of made-up nationalism. After all, the “market” will of course act benignly to prevent, say, toy manufacturers from using lead in the paint of junior’s garage set. And if they were tempted to do so, then the well funded and unimpeachable government regulation and inspection regime which remains intact despite the “clawing back of the state” will quickly find them out. Oh… wait a minute… AbyNormal January 24, 2013 at 6:53 am i still can’t believe LTCM an then Enron didn’t prove the necessity for regulations reinstatement for all the decades of deregulation…where are the jobs now Expat January 24, 2013 at 7:00 am My take on this video, which is excellent, comes from ecoonomist Joseph Heath of York University, Toronto. In “Rebel Sell,” he and his co-author point out that deregulation is not an absence of rules, which he says is impossible, but the substitution of one set of rules for another. He seems to mean that the “market” is a system of rules, however arbitrary and capricious. For a very average economist, this is quite insightful. from Mexico January 24, 2013 at 9:23 am Expat said: …deregulation is not an absence of rules, which he says is impossible, but the substitution of one set of rules for another. Exactly! The Reagan Revolution was not only the dawning of the era of impunity for the transnational corporations, but the jackboot of the police state against the neck for the rest of us. After all, a mano duro (hard hand) was and is necessary to keep us proles in line as we are forced into debt slavery. Three graphs tell the story: “What happened in 1980? — Incarcerated Americans 1920-2005” http://www.dailypaul.com/86866/what-happened-in-1980 and “Real Median Household Income in the 21st Century” http://www.ritholtz.com/blog/2012/11/real-median-household-income-in-the-21st-century/ and “IT’S PRIVATE DEBT, NOT PUBLIC DEBT, THAT GOT US INTO THIS MESS” http://seekingalpha.com/instablog/428250-michael-clark/591021-it-s-private-debt-not-public-debt-that-got-us-into-this-mess from Mexico January 24, 2013 at 10:25 am The only honest assessement of what the neoliberals are up to that I have read comes from Bruno Amable: Since the market order is a construction, a political agenda aiming to institute it can be elaborated… Starting from the premise of a denial of the natural character of the market order, neo-liberal government intervention cannot be reduced to a question of separating the state from the market. The neo-liberal state has the duty to maintain the market order… The state in neo-liberalism is, therefore, not a weak and inactive state, the ‘night watchman’ of classical liberalism. On the contrary, it is a state that establishes and preserves, through its constant action (. . .), a competitive market order which is an artificial human creation and not a product of nature. – BRUNO AMABLE, “Morals and politics in the ideology of neo-liberalism” http://www.perpustakaan.depkeu.go.id/FOLDERJURNAL/Socio%20economic%20review3.full.pdf And Amable minces no words about what sort of polity is necessary to enforce market domination: The idea that a competent elite should decide and be spared the demands for protection that a population of losers is bound to express runs through the writings of the whole neo-liberal family: ‘The world consists of two classes—the educated and the ignorant—and it is essential for progress that the former should be allowed to dominate the latter’ (Fisher, 1907, p. 20). This elitist concept of political power was present in Rougier (1938), where constitutional reforms are advocated so as to protect the choice of a ruling elite dedicated to the defence of the common rules of individual competition from ‘acting minorities’ and ‘lunatic majorities’… This neo-Platonist conception of government is also found in Lippmann’s works, where the contradiction between the necessity to preserve a system of fair rules of competition, on the one hand, and a principle of popular sovereignty over the rules of the game, on the other, is emphasized. The “solutions” proposed by the various neo-liberal schools of thought are based on a combination of enlightened elites and constitutional rules resulting in a limit to democracy. Same_Ol_Guy January 24, 2013 at 8:06 am Risk on as per Forex Kong – now a full 300 pips in profit since morning trade entries. This guy is literally “uncanny” as to calling short term market turns – and now providing strategy and indicators. craazyman January 24, 2013 at 4:11 pm Will he reimburse me if I take his advice and get hammered? You don’t know what a regulator is until you need one, and then it’s too late. Look at all these bozos and their dumb sh*t yacking (sorry I only watched the first 5 seconds of the video). Not one of them ever worked a day in their lives. What kind of job did they ever have except “politician”? God save us from them. They make you feel like the dude in Edward Munch’s painting “The Scream”. They make the entire sky vibrate from their malchromatic and emetic waves of stupidity. That’s why I threw away my TV last year and won’t get an iPhone for the bus. You know they’d show up somehow on the screen talking, no matter what you do, right when you least expect it. craazyman January 24, 2013 at 6:37 pm OK I watched it all. They need a regulation against overuse of vignetting in interview video production. BWAAAAAK! Ask “What would Orson Welles have done?” Just cause the computer can do it doesn’t mean you should. bowhahaha TedWa January 24, 2013 at 10:13 am I just don’t get the hoopla over regulation. Regulation means nothing if it’s not enforced where it needs to be. The meltdown would not have occurred if the existing regulations were enforced. They were not and still are not being enforced. Piling on regulation after regulation so it looks like you’re doing something, but they know and we know that unless they’re being enforced they mean exactly nothing. Regulations are meant to be more than just sound and fury signifying nothing. Alejandro January 24, 2013 at 10:30 am Even in a basketball game, if the refs look the other way, the rules don’t matter. steelhead23 January 24, 2013 at 10:53 am As one who has spent his career as a regulator, through an array of agencies and political leadership, I strongly support this vid, but it misses an important point. Beginning with Reagan and his famous “nine words” speech. aggressive regulation has been viewed as government over-reach. Public perception as well as political corruption is responsible for this. Vids like this one should help allay the public perception that we regulators stifle innovation and economic growth. Sadly, this public perception and political corruption have had an effect on the willingness of regulators to “rock the boat.” It is not lost on fellow employees when the regulator who routinely smooths things over and finds a way to “get to yes,” gets the promotion while those who aggressively enforce the rules, does not. But this kind of “go along to get along” behavior does not well serve the public (SEC anyone?). Strong, effective regulation may reduce corporate profitabiliy, but if done in an evenhanded way, regulation actually stimulates innovation. From self-rescuers in mining to reverse-osmosis water purification, significant innovations in human health and safety have been stimulated by regulation. The follow-up to this vid should offer some practical reasons to support reasonable regulation in terms of the public benefits achieved. Killing Reaganism will take a concerted effort. jsmith January 24, 2013 at 11:02 am How much longer do we all have to count the moles on the emperor’s naked ass body? As From Mexico points to in the Amable piece, neoliberalism – both as an economic and political ‘philosophy’ – is based upon – in its entirety – lies, falsehoods and fairy tales but lies, falsehoods and fairy tales that the elite have willfully and knowingly decided to adhere to and propagate even in the face of growing awareness on the part of the public. Since these lies/fairy tales manifest themselves concretely as false flag attacks, aggressive war, massive financial fraud etc etc the stakes of the “game” for the elite are now so high in maintaining this fiction that there is no chance for any one of them to break with the cabal. I mean, are we really supposed to accept that the elite didn’t realize the profound implications that an entirely fiat-based monetary system could potentially have in providing for a society? That it was just a coincidence that the TINA thrust of neoliberalism in the late 70s/early 80s followed closely on the heels of the end of the US gold standard? That for more than 30 years the elite have been unknowingly been pushing an politico-economic philosophy that at its very heart is theoretical balderdash and political story-telling? As has been discussed in the Lance/Lanny threads – and was put forth by Goebbels and Strauss – go big with lies or don’t go at all. Isn’t the suppression of reality – in nearly every sense – by our elites and the promulgation of fairy tale after fairy tale really what we are all talking about here? Sure, as analytical/rational souls we’re bound to the “rules” of evidence and debate which state that to suggest that we have been victimized by such a massive propaganda campaign would be a bit too much but why not then do what rational people do and propose a model by which we can better understand what has been going on. Much like how MMT better describes the reality of how our monetary system works, wouldn’t be better to also adapt a philosophical model that everything done by the elite is part and parcel of an elaborate make-believe, an dystopian anti-reality that cleverly mimics our own but which actually seeks to undermine it through fantasy and slight of hand which we – as rational persons – feel compelled to rebut one issue at a time even thought the elite plan on our “honest” sojourns after the truth taking so much time that the planning for their next crimes carry on apace? Don’t debate the merits of “neoliberalism” and its “theorestical” adjuncts but rather let’s begin labeling it as nonsense and stop “debating” these criminals and ourselves over their silly ideas which they no are as silly as we are. Their bluff is that the there’s just no way the ENTIRE system could be bullshit from beginning to end, could it? It’s time to start calling this bluff. jsmith January 24, 2013 at 11:08 am should be: silly ideas which they “know” are as silly as we “do”. Although we are silly in that we allow ourselves to continue the confine ourselves within the parameters of the false reality they create. To the elite, neoliberalism and its manifestations are not just one political system among many to be analyzed and compared with others. To them, this is the end, this is the reality that want and they are “all in” in their push to ram it down our mostly unsuspecting throats. nonclassical January 24, 2013 at 12:43 pm ..place to begin is to separate, in public thought, “free MARKET should regulate itself” (market) from “financials=Wall $treet banking…which operates in very nearly total SECRECY, through offshore-dereguated subsidiaries, creating “secrecy jurisdictions”… Ayn Rand’s “free market” nonsense at least provided such detail as “equal access in “markets” to all, based upon equal information, none of which applies to financial sector, speculation, offshore secrecy jurisdictions, set up entirely to create secrecy: http://www.amazon.com/dp/0230341721 http://www.amazon.com/Hot-Money-Politics-Debt-Third/dp/0773527435/ref=sr_1_3?s=books&ie=UTF8&qid=1359049380&sr=1-3&keywords=hot+money allcoppedout January 24, 2013 at 12:20 pm With no regulation any ramshackle eleven of us will beat Manchester United. The secret (sadly) will not be Yves at centre forward, but my coaching team of snipers taking out the United players. jurisV January 24, 2013 at 3:43 pm I like the cartoon that Toles made about rules/regulations during the National Football League “replacement referees” fiasco. NFL fans, and it seemed almost everybody, was up in arms about the unfairness of incompetent enforcement of the rules. Regulation = rules. In the context of football games it’s easy for people to understand their necessity. In “real life” games — not so much. http://www.washingtonpost.com/opinions/tom-toles-on-the-economy/2012/06/13/gJQAzucRaV_gallery.html#photo=5 The other cartoons in the gallery are excellent as well. fred January 24, 2013 at 4:25 pm They can call for all the regulations they want, the regulatory system is now owned by the regulatees, and their calls are useless. That alone tells you the worth of the original regulations and the system that produced them. We have done that experiment, time for a reboot and to back to a system that has a chance of working, precisely because it doesn’t give so much power to the gov, power which is always ultimately controlled by the very rich. from Mexico January 24, 2013 at 6:20 pm So let me get this straight. Because we’ve failed to effectively enforce the laws against child sexual abuse, there’s been an epidemic of child sexual abuse by powerful people (Jerry Sandunsky, Catholic church, etc.) in the United States. So the solution is to eliminate the laws against child sexual abuse? Phew! Who can argue with “logic” like that? Bagehot by-the-Bay January 24, 2013 at 5:54 pm Yves is definitely the star. Progressive Humanist January 24, 2013 at 6:55 pm This is the best NC piece I’ve seen so far (not counting Yves’s book of course)! Great work by everyone all around. KEEP UP THE PRESSURE! Great backdrop for the cat-food fights! Now when will Econ4 open an alternative bank (microcredit lender/co-op member credit union etc)? I’m in! Thanks, Yves! Long life and good health to you always! Francois T January 24, 2013 at 11:38 pm economists who “believe that the economy should serve the people, the planet, and the future.” Having said economists in the minority is proof positive that mainstream economists are the whores of the powerful. It is a scientific truism that economy MUST be subservient to Nature and the planet. Why? Because the services Nature provide to our economies per year is equal to TWO TIMES the entire global GDP! Ergo, the very notion that protecting the environment stifle “growth” is a baldfaced lie. BTW, any medical dictionary or Introduction to Pathology will tell you: constant growth is the very definition of cancer. And somehow, mainstream economists want us to believe that cancer is good for us? Ruben January 25, 2013 at 12:33 am The analogy with sports is apt. Rules are necessary but the presence of a team of referees that’s another thing. Actually the presence of a team of referees may make it easier to violate the rules, as when the referee has been co-opted and the very first rule is to respect the referee. Also, in my own experience as a soccer player, playing without a referee always leads to generally harmonious competition after all players know the rules. Dr. Brian Oblivion January 28, 2013 at 6:45 am I think you glossed over an important process that can be critical to the happy ending featuring “harmonious competition” which doesn’t necessarily require professional referees. If you find amongst your group conspiring to play a memorable and rewarding game of soccer anti-social/sociopathic jackasses who pick up the ball, take it home, have sex with it, without warning employ a chainsaw or deploy poison gas against players on either team, including his own, and uncountable other obvious illegal, immoral, insane, evil (etc) tactics, said jackasses are thrown bodily from the field and are not invited back ever. One thing western democracies haven’t worked out is how stupid and bankrupt it is to make allowances for clearly damaged and non-functional individuals rather than making exceptions for and lavishly rewarding ethically, morally and empathy bankrupt assholes, no matter how much plunder they are able to amass by jettisoning rational behavior in favor of profit. John Cleese demonstrates one of many ways an anti-social soccer player might behave in The Holy Grail, playing Lancelot who misbehaves (anti-socially) upon arrival to a wedding and fails to comply or even comprehend agreed upon social mores. http://www.youtube.com/watch?v=GJoM7V54T-c Clearly Cleese’s Lancelot is not the type sane people would put in positions of power and make endless accomodations for. So why the hell do our societies? ———- At least Lancelot appears to have been confused and assumed his tactics would have been appropriate if he was attempting to rescue a damsel in distress, but phony baloney good intentions or no, you still want to toss this guy out of your soccer circle unless you’re insane. And don’t let Lancelot’s seemingly polite and apologetic manner fool you, sociopaths are able to mimic normal human beings somewhat as necessary for survival purposes, but they don’t really understand (or even care) about the trail of bodies and mounds of flesh trailing behind them other than that its discovery may temporarily hamper the pure pursuit of profit in an unhindered (for them) free market. Bravo, John Cleese! Chris Engel January 25, 2013 at 6:24 am Great video. Not too high-brow either so something I can share with a lot of friends without boring them to death with technical stuff. We need more videos like this that can sit on Youtube and be discovered, promoted to help get this blind anti-government anti-regulation movement to stop. Comments are closed. Tip Jar Please Donate or Subscribe!