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"Regulations were gutted for the sake of a quick profit at the expense of a healthy market."Prompting Tigerhawk to ask:
-- Barack Obama, Feb. 24
What regulations were gutted? He keeps asserting this as if it were well understood, but it is not.One of the symptoms of psychosis is "magical thinking," the belief that one can make something true by a sort of telepathic power -- imposing one's will on events by sheer mental force.
What seems to be happening with Obama is a similar phenomenon: "magical talking" -- i.e., if Obama says something is true, it becomes true, merely because he said it. So as he repeats the assertion that greedheads during the Bush administration "gutted" financial regulations, thus leading to the market collapse, this repetition of the mantra makes it true, even though there is no evidence of any such thing actually happening.
This is very interesting to watch. Obama and other Democrats sincerely want to believe that deregulation is to blame for the current economic situation, since this belief supports their worldview. Because their worldview is so closely connected to their selfhood -- I am a Democrat, therefore I am -- no evidence is needed to support this counterfactual belief. Contradictory evidence (e.g., the role of the Community Reinvestment Act, Fannie Mae and Freddie Mac in causing the mortgage crisis) is furiously shouted down: "Lies! Damned lies! All lies!"
New one for the next DSM revision: Psychopoliticosis.
There was one regulation gutted: the one that said that investment banks should only be leveraged 20 to 1. That was a mistake.
ReplyDeleteThe regulation charge is a knee slapper. A couple of economists at GMU - names and titles unavailable, sorry - did a study of previous presidential administrations regulatory performance. They did not try to judge the effectiveness of regulations; they ranked each 4 year administration by number of pages of regulations added to the Federal Registry and the additions to budget and staff in the key regulatory agencies of the federal government. Bush II (I think the second 4 years was extrapolated) achieved 2 of the 4 most regulatory intense administrations in the last 50 years (sorry, can't remember the President during the other 2 of the top 4). The use of these proxies for measuring "regulatory density" is that it presumes, rightly I think, that the Federal Registry pages are not empty and that the new employees with funds to wield are not idling away their work days reading WaPo. If the "regulatory laxity" argument is proffered, the accuser must be able to defend the assertion with specifics, since the macro context highlighted in the study shows the contrary.
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