Greenspan sees many casualties from crisisMe? I'm hoping the term "self-regulation" is henceforth and forevermore ridiculed as oxymoronic - the butt of jokes, like "military intelligence".
Mon Mar 17, 2008
LONDON, March 17 (Reuters) - There will be many casualties from the unfolding financial market crisis, which will lead to a large-scale overhaul of international banking regulations, codes and risk management, former Federal Reserve Chairman Alan Greenspan said.
He added, however, that he hoped one of the casualties from the worst U.S. financial crisis since World War Two would not be the spirit of broad self-regulation within financial markets.
If we've learned nothing from 1929 and today, it really ought to be that "market self-regulation" does not exist.
Maybe it did in some long-gone fantasy-world: the small self-sufficient village, where many small consumers shopped at many small suppliers, and everyone knew Mary the Milkmaid and Dan the Dairyman.
Adam Smith's basic model was out of date when he wrote The Wealth of Nations. As a recent headline put it:
The Invisible Hand Gets Ready to Smack America SillyThe Depression-era regulatory structures worked so well that Saint Reagan determined to destroy them - and succeeded.
In today's global economy, dominated in almost all sectors by very few key players (I'm betting most of you can name the big auto companies, and count 'em on 10 fingers!), "market self-regulation" does NOT exist!
Stop the madness!