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nickcoons
11-15-2008, 10:05 PM
We Need More Regulation

http://www.nickcoonsforcongress.com/blog/view.php?id=21

Many have claimed that our current economic situation is because we lack regulations. They say that businesses were too free to do what they wanted, and experienced no negative consequences for their bad decisions. It is so commonly spoken, "The problems of today are due to de-regulations," that it's just accepted without question.

Well guest what; I agree. I am in favor of more regulations on the economy, and even stronger than what our government is proposing.

People who know me and understand what my positions are might be scratching their heads and thinking, "huh?"

This is because we think that government regulations are the only regulations, and therefore removing a government regulation is to de-regulate. But free market regulations are far more powerful at regulating business conduct than government regulations. For instance, businesses are regulated by their customers, because poorly-performing companies will lose customer to their competitors. In this way, the free market imposes the strongest form of regulation; bankruptcy.

Given that regulations are imposed in many ways, and that government regulations are generally ineffective, the correct way to think about regulations is:

* The current downturn is a free market attempt to regulate bad business practices, and the current bailout is a form of government de-regulating such that it allows bad businesses to hang around.
* Bankruptcy is the strongest form of regulation.
* Bailouts are the strong form of de-regulation.

Customers are attempting to regulate businesses like many in the automotive industry by not buying their products. The government is de-regulating these industries by handing them cash so they can stay in business while ignoring signals sent by the public. In a free market, these companies would be required to re-organize to meet the demands of the public, or be purchased by other companies who can manage them better in order to serve the public. But bailouts allow companies providing poor products and services to continue to operate.

And finally, it is too often argued that these businesses are too big to fail. But big businesses have failed in the past, and the country's economy has not come to a stand-still because of it. Montgomery Ward, which began in 1872, failed to efficiently meet the demands of its customers and was forced to close down its chain of retail stores and catalog in 2001. Four years later, it reappeared as an online entity. Pan Am, a major airline, collapsed in 1991, and other airlines were there to pick up the slack. Businesses fail, are reorganized, or are replaced by other more efficient organizations that can meet the demands of the public. If GM, Ford, and Chrysler fail, the demand for vehicles will still exist, so their assets would likely be sold to another automotive manufacturer, and that company would need to hire experienced personnel to continue running the factories.

We must get Congress out of the way and out of the market, so that the American people can regulate companies by deciding whether or not we want to do business with them.

heavenlyboy34
11-15-2008, 10:12 PM
Thanks for your insight, sir. What do you think of the conservatives' most recent argument (that I know of)-"it was the unions' fault. Their demands for higher wages set manufacturers up for a big fall." (and others to that effect)

Conservative Christian
11-15-2008, 10:43 PM
Viva CONSUMER regulation of business!

Down with GOVERNMENT regulation of business!

Danke
11-15-2008, 10:55 PM
Thanks for your insight, sir. What do you think of the conservatives' most recent argument (that I know of)-"it was the unions' fault. Their demands for higher wages set manufacturers up for a big fall." (and others to that effect)

Not really a recent argument. They have been trying to escape blame for their shortcomings for years. The fuck up and go up principle.

When I was an officer in the military, we didn't blame the lower ranks or enlisted when the mission went afoul. Managers (officers for the most part) got fired.

Union membership is small and at an all time low. But they still want to blame their troubles on labor, not management.

nickcoons
11-15-2008, 11:47 PM
Thanks for your insight, sir. What do you think of the conservatives' most recent argument (that I know of)-"it was the unions' fault. Their demands for higher wages set manufacturers up for a big fall." (and others to that effect)

I think it's a way for them to deflect blame from their failed policies.

Government policies created the conditions that ultimately caused the economic downturn by expanding the money supply thereby making credit easier to get than it should have been if credit supply was set by the free market.

When consumers stopped purchasing from certain companies, showing their dissatisfaction, government policies then deepened the wound by providing these companies a way to continue existing, negating the signals sent to them by consumers.

If you want to borrow $20 from me, and someone will replenish my supply of $20 bills if you don't pay up, then I'm going to loan you money regardless of your ability to repay it. This puts the guarantor on the hook, which is the taxpayers in this case.

If a company can choose to provide good products and services (which takes effort) and make money, or they can provide lousy products and services (which takes far less effort) and make money in the form of a bailout, then this company has no incentive put forth the effort. In both instances, consumers are paying. In the first as a customer, and in the second as a taxpayer. So again, we're caught on the hook, and the company in question has no reason to satisfy us.

To try and place the blame elsewhere, like on unions, has no merit.