On November 27, 2012, Doug Bandow wrote an article on the Freeman website, entitled, THE FUTURE BELONGS TO LIBERTY, Indivisible Liberty: Personal, Political, and Economic.
In Bandow’s article, he said, “…when it comes to economic liberty, a lot of people suddenly change their tune. It’s as if economic liberty doesn’t count. Indeed, this facet of freedom seems to stand alone, vulnerable to state regulation and control.”

We have to ask ourselves why the regulation happened in the first place? It happened because some danger or injustice had taken place to prompt the regulation to occur.

For nearly a century, the American colonists had been able to develop and regulate their economic system. Suddenly the British Parliament began to impose a series of regulations that the colonists had no part in formulating. That happening helped spark the Revolutionary War because of “Taxation without representation.”
History is legion where corporate America has abused the laws of our country which help protect the rights of the individual. Likewise, it is also true, that there are times where the regulations are too severe or not needed which unfortunately occur when government has overstepped its bounds and created a “need,” when no need is necessary. In that sense, we must recognize the limitations of any governmental regulatory agency, but to be regulation free is not what this country needs at the present time.
This is particularly true in the last several years, where our country is just gradually digging itself out of our latest recession of some proportions. That recession began in the early months of 2008, with the collapse of Bear Stearns and the failure of Lehman Brothers in September 2008, resulting in financial market turbulence which was anything but mild in scope and duration. There are financial professionals and nonprofessionals alike who have equated the U.S. recession as being only 2nd to the Great Depression, and believe that if the government hadn’t stepped in we could possibly have experienced a depression equal to or worse than that of the Great Depression.
The immediate or proximate cause of the crisis in 2008 was the failure or risk of failure at major financial institutions globally, starting with the rescue of investment bank Bear Stearns and the failure of Lehman Brothers. Many of these institutions had invested in risky securities that lost much or all of their value when U.S. and European housing bubbles began to deflate during the 2007-2009 period.
The reasons for the severe recession were multiple in natures. One of many important factors contributing to the severe economic collapse was due to the lack of adequate governmental regulations of the banking industry.
It is generally thought that with the advent of easy stock trading via the internet and the introduction of derivative trading, because of the lack of federal oversight, the investment banking sector flourished. What resulted was the lack of openness and basic regulatory controls.
Under normal circumstances, which would be true prior to the mortgage bubble and would be the typical method of securing mortgages, the borrower typically had to pay down 20 percent of their desired investment; the remaining 80 percent could be borrowed from a lender. Moreover, the consumer could take loans worth no more than about four times his or her annual salary.
This typical method of securing mortgages using the aforementioned borrowing format was not in vogue, all of which contributed to the formation and the bursting of the mortgage bubble. The collapse of the mortgage market was due to sudden and mass mortgage foreclosures, thus helping precipitate a severe recession. This in turn helped cause a nationwide financial collapse, primarily due to banks engaging in risky lending practices offered to home buyers seeking subprime mortgages. Since many didn’t qualify for a loan because the parameters for qualification were not met, nevertheless, they were offered subprime mortgages anyway; financial collapse of our country’s lending practices was the results.
It was indeed due to the housing bubble that caused the home and other real estate prices to nearly triple for the period from 1999 to 2007. This huge increase was due in part to the uncontrolled credit given by the American banks that engaged in such practices, and which further increased demand in the housing sector. On December 30, 2008 the home price index reported the largest price drop in its history. By August, 2008, increased foreclosure rates among U.S. homeowners led to a financial crisis of epic proportions. As early as October 2007, the U.S. Secretary of the Treasury had called the bursting housing bubble “the most significant risk to our economy.”
In the early 1930’s, my maternal grandfather said, “The two worse evils in the world are greed and intolerance.” I’d settle for only getting the “greed” part of the equation better under control, until that’s done, and our financial leaders can prove my grandfather wrong, I believe further regulation of financial institutions need to be maintained. That’s true, regardless whether we have a Democrat or a Republican Congress or president governing our country.