3 votes

Romney, the faux Conservative on Banking regulation

Why do Republicans try to act like Democrats? Had Ron Paul been up there in the debates, he would have explained that the banking industry does what it does due to moral hazard, not lack of regulation. It saddens me greatly that so many conservatives think we need regulation, rather than an end to all industry bailouts and special favors.

Romney said, "Of course we can't have someone open a business in their garage." But why not? Aren't private contracts, the threat of business failure and the need to maintain a good reputation in the community more reliable bulwarks against banking fraud than industry written regulation?




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Regulations are Protections

If these companies were truly at the mercy of the free market, they couldn't persist. A republican talking about free markets and property rights is like a democrat talking about a strong middle class and mutual aid.

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"Aren't private contracts,

"Aren't private contracts, the threat of business failure and the need to maintain a good reputation in the community more reliable bulwarks against banking fraud than industry written regulation?"

Were this true, how does Monsanto get any business? How did BP not lose revenue after their disaster two years ago? Why does the Catholic Church still get so many donations every year? Why do people continue to do business with Citibank and BOA?

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Monsanto had regulations and

Monsanto had regulations and laws written to favor them. There was a liability cap for BP. Not every Catholic priest is a child molestor. In fact, I would venture that the vast majority are not. Why is it ok to libel all Catholic priests but not rabbis? hmmmm. People continue to do business with those big banks because our govt bails out the biggest banks, and allows them to craft the very regulations that are supposed to keep them in check. Romney was right that Dodd Frank hurts smaller banks, but he is disingenuous about this. He does not care about small banks. After all, he vigorously supported the bailouts.

In short, I never claimed that one of these three factors prevent fraud or unethical behavior without the presence of the other two. For the market to self-regulate, there must be no special favors, no bailouts, no corruption of the legal system, and the ability of smaller businesses to compete with the bigger ones. We don't have that type of society right now. But we could! That is what Romney shouold advocate for.

The irony is that the one regulation that could have prevented this mess is the one supported by Dr. Paul: Glass Steagall. He argues that as long as we have and FDIC, we need that one regulation.