Look how bad deregulation is!

[raistlinkishtar]

I hear this a lot from people and I have no simple answer. Deregulation of California's utilities caused huge price increases...a measurable fact.

It's also caused a lot of market uncertainty in other industries.
http://www.commondreams.org/views01/0831-03.htm


But I can't bring myself to let people tell me that deregulating savings and loans finance caused a financial meltdown and then apply that to all industries.

[Bman]

huh? The link you posted has no real information. For instance from the top f the bulleted points.


Savings and loan dereg. $500 billion charged to the taxpayers. Enough said.

What, how, where, why? This is a meaningless amount of information because it just says something with no data, not even so much as a footnote. I don't know what you are trying to get at but something a bit more reasonable may actual say something significant. This link did not.

[Travlyr]

I hear this a lot from people and I have no simple answer.
An accurate and complete understanding of capitalism is the simple answer.
Capitalism in its most simple form is the natural law of free-markets. Humans using natural resources (capital) to produce something of value to trade.

Molly Ivins never understood liberty or capitalism.

Partially deregulating is not deregulation it is simply less regulation. Deregulation is the absense of regulation. That is what works but is seldom tried. The Internet is not regulated yet. That's why it works so well.
Strict laissez-faire free-markets are self regulating.

[Heimdallr]

I hear this a lot from people and I have no simple answer. Deregulation of California's utilities caused huge price increases...a measurable fact.

I haven't researched that claim, but it sounds like a government-sanctioned monopoly to me.

Sort of like this:
http://en.wikipedia.org/wiki/2000_Cochabamba_protests

[cswake]

I think the place to start is to understand what regulation is - a law or rule that controls or manipulates conduct of individuals or companies. The financial system and the utility companies are both artificial arrangements that were created through government regulation.

In your example, the utility companies have their monopoly because of the government, and due to this regulation, additional regulations have to be instituted to correct for the behavior that would not have been there had the government not interfered. As Travlyr correctly points out, if you just deregulate the post-regulations that attempt to correct the problem of interfering to begin with, you have a situation that is worse than had the additional regulations been there.

This is very similar to the financial markets, which are a construct of government. A very specific example there of what I'm talking about is the insured deposits - government interference through regulation - that require additional regulation, such as Glass Steagal, to correct the problems of the moral hazard that was created with the original action. (A secondary regulation to prevent the banks from gambling with the deposits the government insured for them)

[NYgs23]

I'm tired of talking about regulation and deregulation in the abstract. What were the regulations in question? What were the deregulations? She doesn't specify. A lot of changes that come under the banner of "deregulation" only make things worse because they're deregulating markets already distorted by other government interferences.

For example, the repeal of Glass-Steagal only exacerbated the problem because of the moral hazard engendered by federal deposit insurance, a moral hazard that was regulated by Glass-Steagal. Government deposit insurance would have had to have been abolished first. But government deposit insurance was itself put in place to prevent bank runs caused by fractional reserve banking, an illegitimate private banking protected by the state. So you would have had to get rid of that original market interference first, then deposit insurance, then Glass-Steagal at the end.

So it's not as simple as waving a magic deregulation wand over everything. It's more complex than that.

[Elwar]

Deregulation of industries deregulates industries in the same way that the PATRIOT Act is Patriotic.

What California did was deregulated the sales aspect of the monopolized manufacture and distribution of electricity.

Basically like having a government car industry that allows competing sales. All the cars are sold to the car lots for the same price, the car salesmen only compete on how much they're going to charge. And they all started just jacking up the price.

Georgia did the same thing with the natural gas industry as well.

The energy companies used to be given the monopoly as long as they didn't charge more than X dollars to the consumer. That restriction was taken away by "deregulation".

Texas actually did deregulate the electric industry. They allowed any electric company to produce power and consumers can choose from many different companies for their power. That's why they're booming with wind power and various other power sources because they're allowed to compete with the old producers. Texas is coming very close to having enough wind power to power the whole state.

Don't be fooled by false "deregulation".

[forsmant]

Regulations need to focus on keeping businesses honest not micromanaging them and putting up barriers to entry. Deregulation can cause havoc just as over regulation can. The government should not specify how the business is run or who can run one so long as they stay honest.

[akforme]

Ask them how many coal plants were opened during this massive deregulation to compete against the almost monopoly held by enron and Natural gas.

This is a case of the government deregulating liability in a monopoly, not deregulation of the market.