Letter of the week, 6/7/10: Deregulation doesn't work

[David]

Deregulation
Editor:

Letter-writer Ed Cozzette of Wallingford (R-J, 6-6) is getting fancy with names and dates, but he remains completely aloof when it comes to basic U.S. financial history. This, in turn, leads him to make inane (if not insane) policy prescriptions.

Financial History 101 teaches us that the period of the strongest sustained growth was the three decades following the Second World War (1947-1973). During this time, real GDP grew at an average annual rate of 4.0 percent. In comparison, excluding home equity extraction for the obvious reasons, the Bush decade saw GDP grow at an annual rate of 1.0 percent.

During the post-war decades, we had a “boring banking model” in the words of former IMF chief economist Simon Johnson. Strong regulations were put in place for banks and the wider economy, leading to one of the most inventive and egalitarian periods in U.S. history (GDP growth matched wages, health, etc.). Incidentally, too, the greater part of development and invention occurred in the state sector, mostly under the Pentagon (think mainframes, microchips, and other computer technologies).
Most important is the fact that the post-war decades were relatively free from any serious economic crises.

Nowadays, economic crises occur roughly every 5-7 years (as JP Morgan’s Jamie Dimon affirmed). There’s a good reason, too. It’s called Reaganomics. It’s the idea that we should free the financial sector to do what it wants, when it wants, how it wants – and then bail them out when it all falls apart for the predictable reasons.

Cozzette asks us to follow this model. But we should ask him, in turn, what deregulation has given us – other than three decades replete with crisis after crisis. What regulations provide us, however, is a way to allocate resources knowledgeably and transparently, with concern for all of us, and not just a few.
TYLER CULLIS, WALLINGFORD

[oldnickel]

Deregulation has never, ever worked. One of the selling points to deregulation was that there would be increased competition and lower costs. See any new phone companies? How are your cable bills these days? Electric bills any better?!!!!. How has service been?

In fact, Comcast was fighting (crying) to keep U-Verse out of the market.

[whitey495]

Originally Posted by oldnickel

Deregulation has never, ever worked. One of the selling points to deregulation was that there would be increased competition and lower costs. See any new phone companies? How are your cable bills these days? Electric bills any better?!!!!. How has service been?

In fact, Comcast was fighting (crying) to keep U-Verse out of the market.

You hit the nail on the head! Perfect example, especially the cable companies.

[wawogi]

Well, what do you know, oldnickel...we agree on something.

[CMNSNC]

I'll use this to bring it to a more managable level because what has happened is so complex that I believe no single person can explain it.
Anyone who has a dog or two knows that if left to its own devices a dog will pretty much do as it damned well pleases. To be better for both the dog owner and the dog itself some amount of discipline is needed. The same for children. Otherwise there is chaos.
Reganomics promised the 'trickle down theory'. Leave the big corporations alone from government intervention and they will make more money. The more money they make, the more jobs will be created.
Well, in a way that kind of worked. Mexico has more manufacturing jobs than it ever had before. Items that once said "Made in U.S.A." now read Made in China, Taiwan or some other place thousands of miles away.
The 'trickle down theory' has worked very well for millions of Americans.
I don't know about you, but I am feeling very wet!
Now the supreme court (I won't even give them the honor of capatalizing the name) has given even more power to the very rich running for office.
Click on the link below and let's have a discussion about the latest decision to come from down on high!
http://www.nytimes.com/2010/06/09/op...html?th&emc=th

[wawogi]

Well, it's only fair, I suppose, to protect the First Amendment rights of the wealthy, self-funded candidates, since the supremes recently gave corporations "personhood" rights in elections.