mplaut

Roubini Attacks Bailout, But Misses Boat on Regulation

Can the markets fix whatever is wrong? Yes, of course.

Will it cause pain? Yes, a lot.

Do markets working on their own develop problems that need to be fixed? Yes, all the time.

It is simplistic to argue that if regulation brought on the problems, then it should not be allowed to fix them. For one, unfettered markets will also bring problems that they could fix.

The premise of regulation was never that no problems will arise. It is that regulation will correct the problems with less pain than the markets.

IMO so far regulation has muddled through, and a lot of pain has been avoided.