Greed: It’s Why We Need Strong Financial Regulations To Avoid Another Meltdown

I think it’s safe to say that all but the most extreme (and potentially selfish) anti-government libertarians would be for regulations when it comes to aviation including the safety of the airplane that takes you to see Aunt Betty in St. Louis. I think most would be hesitant to trust a for-profit company to regulate itself when it comes to the flight-worthiness of an aircraft. Sure, a company that neglects maintenance and has many fatal accidents is likely to go out of business quickly but nobody is willing to allow that market to work itself out because it means putting your life on the line when you board an airplane.

Unfortunately many who see the benefit of regulations when it comes to air travel do not see the benefit when it comes to financial markets. Apparently the independent streak in many Americans kicks in only when they don’t see the direct impact on their lives. If their life isn’t on the line then they can get on their libertarian soapbox and shout at the top of their lungs “They may take our lives, but they’ll never take… OUR FREEDOM!”

The simple fact is markets do a lousy job of self-regulating, especially financial markets. The problem is you can never remove the greed factor. And no, greed is not good. Greed clouds better judgement. They might be the smartest people in the room but greed turns them into wealthy fools. The idea that the smartest people in an industry should make the rules is wrong and dangerous, as we saw in 2008 with the worst recession since the Great Depression, and we are still experiencing the effects of this foolishness in 2012.

This is why we need strong financial regulations.

I ask that you think of this when you hear Republicans, including GOP presidential candidate Mitt Romney, talking about how they are going to fix the economy with less regulations.


photo by burstingwithcolors

GovernmentThe 'Free' Market

#air travel#airline#airplane#economy#FAA#financial market#great depression#greed#recession#regulation