Why Regulation Matters - James K. Galbraith

[adelle0001]

Does regulation matter?

[boarddog1]

i wana know what he says about France!!!!!!!!

[frencheneesz]

This guy is telling me I trust planes because of some bullshit government regulatory system?? I get on planes not because I trust boeing, or because I trust the government (HA!). I get on planes because they have a long standing record of safety and reliability. Has the FAA helped reach this state of reliability? Maybe, maybe not. But people don't just trust things - they trust things that work. And government regulation very seldom works. Look at airport security! What a failure.

[jtropeano]

James K Galbraith got absolutely crushed by Milton Friedman in Free to Choose.

[58robbo]

that the way it should be. we think that we're safe because the govt mandates it so. therefore we never question whether the water is clean!

[Jyoyo1]

I still dont trust our food nor the water.

I dont trust our regulators as they are compromised.

I dont trust our financial institutions despite tons of regulations and assurances.

Strong regs without enforcement do NO good.

Weak regs without penalties do NO good.

Complex regs with loop holes do NO good.

Who is the best enforcer of integrity - government or the market?

This is a valid question not to be dismissed.

Often regs instill confidence where perhaps there should be NONE.

[kotash2]

He's just jealous his father was smarter than he was. Just like George Bush II. His father thought that b/c the public areas of life were the problem areas that we should fund and subsidize the public at the expense of the private EVEN MORE> Except his father didnt realize, didnt even bother to study how much govern. had grown in the last 60 years. Now we toter on the edge of a socialist abyss and its all b/c of this guys dad and Keynes. Thes people are to be reviled.

[thesparitan]

remember when you disagree with someone, always call them a socialist.

[kotash2]

Actually I call them a trotskyite

[thesparitan]

rock on dude.

wow. i am a troskyite and this guy is not one. but what ever you dont really care.

[kotash2]

socialism, communists, welfare statists etc..they are all just names for immoral criminal theft, coercion and confiscation. They are euphemisms for depostism, totalitarianism. They provide intellectual justification and state sanction to murder on a grand scale. There's a reason why the 20th cent was the bloodiest in human hx: b/c of the rise of collectivist movements. Nazi's were socialists ( national socialists) Communists were global socialists. All that worked out really well.  Good luk

[thesparitan]

oh my god you are a wacko.

WHY ARE THERE SO MANY INSANE PEOPLE ON YOUTUBE.

[kotash2]

Why a wacko? why not call me a libertarian. A businessman, a free american. A father. A physician. a biochemist. An entrepreneur. A gun owner. A peaceloving, humanity loving...happy to be alive kinda guy....who would defend myself, my family and my country against collectivist thugs who would steal my honestly earned property and enslave me and my children.

[kotash2]

@thesparitan its all true! if 60 percent of the people in the nation decide to take income from the other 40 percent you call it taxes to hide the fact that its theft and immoral. Collectivist, socialist centrally planned economies have failed again and again throughout history. Price fixing + wealth redistribution have NEVER worked to create prosperity + peace. Keynes+ Galbraith's arguments were+ are flawed + have been completely discredited.

[thesparitan]

@kotash2 i dont find you to be a rational person and therefore i cannot debate you. you dont argue with people that are not of sound mind. you are saying things that are so far from normal that i dont think you are well. a libertarian. A businessman, a free american. A father. A physician. a biochemist. An entrepreneur. A gun owner

i think that is made up. only say this when i truly believe it, i dont find you to be a serious person.

[kotash2]

@thesparitan @thesparitan @thesparitan I have no reason to make stuff up Just trying to express that based on my upbringing+edu (very middle class born US citizen) that I know that Keynes+ Galbraith are wrong! I studied biochem in school I am in fact an MD in private practice. I have a degree in Philo. Galbraith has essentially no real understanding of what makes a free economy run+grow. People far smarter than me have epressed this about him+his dad: read this is you want:

[mwells219]

internet lolbertarian basment dweller.

[kotash2]

@mwells219 Very creative! Actually Im considered somewhat of a captain of industry. I like U tube b/c I get to see the total ignorance of economics + history out there. I get to see the cult of Keynes + Galbraith + their naked marxist fallacious propagnda denigrating acheivement, disparaging ability. Theirs + yours essentially is the doctrine of hatred of humanity + the belief that everyone should be controlled by the state

[PavedStones]

@kotash2

"I like U tube b/c I get to see the total ignorance of economics + history out there. I get to see the cult of Keynes + Galbraith + their naked marxist fallacious propagnda"

LOL... And I suspect you don't even see what's wrong with this sentence...

[mwells219]

whatever. you sound like a douchebag who has to post on youtube beause no one will listen to you in real life.

[kotash2]

@mwells219 Right well at least a douchebag serves a vital function for those women who need one. In fact thanks to free market capitalism women can go buy products like that for low prices from great companies like Johnson and Johnson. No marxist demigogue could ever even hope to produce an affordable quality douchebag.

[DashBran]

I like how this guy has to use the initials J.K. INSTA credibility.

[4449911]

How often do you get invited to decide what Burger King and McDonald's put on the menu ?

Or how much profit will be eaten up by the CEO's $10M golden parachute ?

These entities watch the bottom line with labour, but not with executive salaries, which run 400x -800x the worker. The whole problem is the shareholders have lost control of the boards of directors (happened when the Berlin Wall fell down) so the theory that business is somehow efficient or organic is out the window.

[ferrozm]

This assumes that only the government can regulate. A company markets its reputation when it sells its products and so does a distributor when it chooses which products to sell. There are many independent oversight companies. Underwriters Laboratory for example is one of them. It is naive to think that given the power to regulate that politicians won't appoint people to protect their buddies in industry or abuse the power. Power corrupts absolutely.

[amet1980]

what ever improvements have occur to product and services reliability, came through government.

when a proper and thoroughly regulation and moderation system is placed the consequences towards citizens minimize or eliminated all together.

[Perilous3D]

Regulation can exist just fine without a governing force.

[HarryNRubin]

agreed!

[beancube2008]

Low income have difficulty when high high price in house but people still have to risk because they have to crash the market in order to have affordable houses. Top-down consummerism fraud and its bottom-up feedbacks.

[jimbob6986]

Yeh but you need government to clean up shit storm mess that is left over.

[Perilous3D]

I feel bad for you if you truly believe that. IMO, I find it a real shame that people have lost their own ways in a sense. We don't need to be ruled by any sort imperialistic system. We are completely capable of making decisions for ourselves and running our own lives. Big brother serves absolutely no purpose other than to push the agendas of our capitalist societies. Put some serious though into it and you will realize you need to be governed like you need a hole in the head.

[jimbob6986]

No, it's just that we live in the real world where information asymmetries and other such market imperfections mean that there is a role for government in smoothing out economic cycles from frequent and recurring catastrophes and crises. I believe the least government is the best, but that government we do have should work effectively. The notion that we need no government at all is purely utopian in my view.

[IVoteNone]

"there is a role for government in smoothing out economic cycles from frequent and recurring catastrophes and crises.."

And I guess economic cycles and catastrophes are entirely unpredictable and have absolutely no causes, right? No. Economic problems have their roots in government "solutions" to previous problems.

[jimbob6986]

Yes indeed some do. BUT markets are not divinely functioning entities that would tend towards a natural equilibrium in left to their own accord. They are prone to massive fluctuations which is why governments often get involved to smooth them out. That is more or less fact. where we move into opinion is where someone like myself believes that the unintended consequences of government intervention are acceptable when compared to the tendency of a thoroughly free market mechanism to over correct.

[IVoteNone]

By definition economic equilibrium is only possible in the absence of interferences. There are supply and demand shocks which change the combination of output, but markets are not inherently prone to massive fluctuations. A top down structure with just a few people ordering this and that and trying to manage and regulate and control everything with thousands and thousands of pages of arbitrary regulations and sudden unpredictable rule changes is a recipe for chaos.

[beancube2008]

Should regualtion implementation be from top-down or bottom-up? If we skip proper puplic information collection and proper public challenge of proposals, we would be end-up with a lot of craps like the bail-outs, the default credit swats, credit cards and bad funds in high risk house mortgage derivitives.

Priorities to housing and employment are way aparted.

[jimbob6986]

Ur comments make no sense. Please be more clear.

[AntiSchiff]

@Perilous3D

Whatever, pussy. If you're one of those extremist libertarian types, if you ever got the world you wanted, someone would beat you up and take your lunch money, daily.

[Perilous3D]

@AntiSchiff You better have a big crew to back yourself up and your thug ways because you wouldn't survive a second in my community, chump.

[AntiSchiff]

@Perilous3D

Your momma, fag.

[Perilous3D]

@AntiSchiff It's great that I don't have to say anything. You just make yourself look stupid. Keep up the good work!

[mushroomagicman]

..................and yet the schools are good eough for his kids.........and the electrical goods we import from china are safe!!!!!!!!!!!!

Hmmmm something's not right here.

[eirefrance]

What does your comment mean? In the US, we have quality inspectors for most commercial goods, so electrical supplies imported here from China must meet that standard. If you're implying that this is proof that the free market works, you're extremely wrong. And, what does the quality of schools have to do with food safety?

[PaulCynic]

Just to add a fact, 70,000 children are dead in China from an earthquake that toppled a great number of schools built without Codes and enforcement. What's worse, is that 70,000 is only the identified bodies, I believe the number is in the hundreds of thousands. A year later, China is telling angry parents to 'get over it'.

And I think that mushroommagicman was being ironic :P read his statement again.

[revanSW89]

Corporations will get away with what they can. Free market capitalism does well to a degree but you can't trust manufacturers. Many complain that the government is corrupt or incapable. Well, if the same theory of free market applies, shouldn't elections keep politicians in line?

[truthadvocate]

This is a crappy argument. There is no reason that government has to be the air-traffic controller, or the water tester, or serve any of these roles. The market performs better, provides more value, and can fill any of these needs. If there wasn't a government monopoly on air traffic control for example, there would be companies competing for the slot and as a result the quality of service would be better and the price would be lower.

[Navywxman]

truthadvocate - contradcitory name aside, I would have to say your argument is crappy.

The market performs better? Haven't been watching the news the past 2 months? 8 or 30 years?

Government is certianly not all good for sure but the market is and daily on the news has been a whopping failure and especially without regulations hence the massive bailouts in the works.

I heard your arguments from the corporate paid think tanks for years which led us to the current crisis. No thanks!

[truthadvocate]

Markets and government aside. Why do you think a monopoly is better? When two entities compete for the same business, they improve the quality of their service in an attempt to out perform their competitor. They reduce the cost of their service also, in an effort to beat their competitor's price. Consumers benefit from a lower price & higher quality. That's really what were talking about here. Competition vs. Monopoly. A monopoly isn't good whether it's in the private sector or the government.

[Navywxman]

truth - Where did I say I think a monopoly is better? I recall no such thing.

I did talk about the benefits of regulation, their need, and examples of why they needed to be instituted. Current events speak for themselves exactly why regulations are needed. WIthout them the profit motive coupled with theives in private industry and their bought politicians have wreaked havoc and are handing us the bill... yet again.

[truthadvocate]

Navywxman, when you go to the store, do you buy anything without considering the funds you have available? Without considering which products are the better deal? The "profit motive" is not some evil thing. It's making responsible decisions with the resources you have available in order to provide for your employees, your family, your customers, those you care about & yourself in a sustainable way. Thieves? The only thing that steals your money without fear of punishment is the government.

[truthadvocate]

In the world of competition we have product research companies like Consumer Reports. They do an excellent job of informing the consumers on the dangers & risks associated with certain products & services. But when a government organization regulates an industry, it forms a monopoly over this role. It tells you what you cannot produce, what you cannot buy, what you cannot do. Notice there's no competing alternative to the FDA. Plus politicians are corrupt. Their decisions are self-serving too.

[truthadvocate]

One more thing, the only way monopolies can survive, is if the government gives them an unfair advantage. Regulations are often the way the government provides that advantage. I'm glad you brought up "recent news" because that's exactly how Fannie Mae became such a giant company. Large enough to created massive artificial demand for bad loans, contributing to the mortgage bubble.

[IVoteNone]

"Where did I say I think a monopoly is better? I recall no such thing.."

You will. Just one second..

"I did talk about the benefits of regulation.."

There. You said it.

[4449911]

Is it REALLY a mono-poly when the entity is accountable to the pee-pull ?

Competition leads inevitably to monopoly - with a public face and a private agenda of profit and bonuses - with no room for public scrutiny in the event of a "problem".

[truthadvocate]

That's incorrect. Competition usually results (over the long term) in two market leaders in each category competing for the vast majority of consumers: Coke & Pepsi, McDonald's & Burger King, IBM & Macintosh... What do you consider a "problem"? What about forcing people to put their money in a "social security" fund. Then spending that money on other things? Government gets away with it. Business with competition cannot force you to do anything & if they don't deliver they go out of business.

[IVoteNone]

"Competition leads inevitably to monopoly.."

Absurd, and unsubstantiated by any historical evidence. Look at the late 19th and early 20th centuries for example. Look how all the regulations during this time period created barriers to entry and protected domestic industries.

[VgolddiggerV]

Sure there are lots of greedy people and company's there that will cut corners to increase margins, i.e. the milk contamination that made lot of babies sick and die. You can count on those companies will be out of business and the people involved will be jailed if they are lucky, or executed if they are not. How is that for incentive for self regulation.I must also admit that I will never buy any made-in-China stuff that I put in my body and any cheap Chinese made stuff. You know, just in case

[allgoo19]

To VgolddigerV:"Sure there are lots of greedy ..."

You are contradcting yourself, just in case you didn't know.

[PaulCynic]

Were there inspectors in place, those babies would not have died. If the government took an active role by ensuring that no contaminants were in the food, or poison in the toothpaste, or if the schools were structurally sound, then hundreds of thousands of Chinese children would still be alive. Those are deaths from an unregulated market just over the last four years. The purpose of gov't regulation is to PREVENT tragedy where it can. I think your free market Darwinism is immoral.

[VgolddiggerV]

I can get everything there that you can get in the States, and more, and quality is just as good or better. Most of the stuff are actually better quality there, such as furniture, house wares.

[czorbin]

the financial market is the most regulated market ever. enforcing new rules is only going to blow more money. we really need less rules and to not worry about trying to bail out failing companies specially when they can only project that a bailout will save their ass for a few months.

[Navywxman]

wrong, the removal of many regulations led to the crisis. This is the most basic fact of what occured.

[chris3443]

Regulation/oversight of anything is useful, but not done by the government.

[bennygale]

Who would you have conduct the regulation/oversight you say is useful?

[chris3443]

Watchdog organizations do a pretty good job of watching the government, why not do the same thing for companies and do away with government altogether? The government has less incentive than a private organization to do its job well. Your morning coffee is safe and delicious because the coffee company wants you to come back to their brand. Same with water as this man notes as an example, if there were choices between water companies, the best one would win your money -- (1of2).

[chris3443]

---and whatever company you choose would have a regulatory company that guarantees the quality of the product, an insurance company basically that pays you recompense if it fails in its job of protecting you.

[hallelujaallahuakbar]

Come on. Watchdog organizations? i.e. Volunteers, or worse, paid (bought) employees of a think-tank like organization?

The organization should be in some way accountable to the people. Ideally government works that way. If it doesn't, improve it, instead of selling off its duties at auction.

[HarryNRubin]

good explanation! still, this guy sounds so much smarter than me, i wish he was running my life...im too stupid to regulate myself...

[PaulCynic]

Haha, here's the irony, if you were selling goods to other people, then those transactions may need to be regulated to ensure that you're not some immoral shithead willing to sell poison to babies (milk). But when it comes activities that affect only yourself, the gov't should mind its own fucking business. Did that clarify the argument?

[HarryNRubin]

Its not my job to find out whether the milk you give your baby is safe. That's your job.  The government should mind its business no matter what.

[Navywxman]

Actually government can and has been good in many things at regulation and oversight. It is all the better when what is taking place is open to public scrutiny so watchdog organizations can help ensure accountability.

Your arguments of private interests being better has actually been shown the opposite. Private interests were polluting air, water, food, the financial sector etc. until gov. regulatory agencies were created to set rules and standards that the private interests weren't doing.

[PaulCynic]

Ralph Nader has done a fantastic job by improving the safety of consumer goods through his watchdog organizations. However, he did so by going to the gov't with his findings and then they passed laws that compelled industry to raise their standards. Gov't is part of the equation no matter who you feel should do the watching. Btw, industry is deaf, it only listens when financial penalties are imposed--bascially because no real person is accountable/cannot be sent to jail for fraud or cheating.

[toolshed333]

Yes I agree 100%. Government regulation like the FDA is pathetic. I trust private company rating systems much more, because it works on reputation. A trusted rating agency will not risk a few bucks at the cost of their entire company's reputation, which is their long run income.

[seamoremonster]

Tell this to libertarians and conservatives.