BansheeX:Without defining what you think regulation is, I don't know how to respond.

I was being rather literal in my translation. I've basically gone through the whole video and restated what I believe Ron Paul is saying. I'm not really putting forward an opinion of my own.

I believe though that what Ron was alluding to ,and what I was calling 'regulation', was any kind of new or extra government intervention. The best thing the government can do is either nothing or ideally re-evaluate some of the fundamentals.

In reply to this comment by BansheeX:
>> ^FishBulb:
Okay this is my interpretation of what he is saying:


Without defining what you think regulation is, I don't know how to respond. Government can't direct or stabilize transactions between millions of people and industry, that was sort of the problem to begin with. The interventions that have inadvertently perverted capitalistic incentive and self-regulation are too numerous to list. It's hard for the common man to understand how it happened, it was a chain reaction from trying to prevent banks from ever going bankrupt because this is perceived as bad for the economy (just this sector, I know, it's hilarious). Let me give an example. If you're a big bank and the central bank via the approval your government friends you helped get elected says it will bail you out if you lose your risky bets on real estate, what action are you likely to take that you otherwise wouldn't have taken? Now that you don't have to worry so much about bankruptcy, you go ahead and hedge billions of dollars of other people's money on subprime and junk bonds when Wall Street was rating them triple A. This yields such a high return, you can offer 5% yields on savings account. Even though people are skeptical of returns this high, they can't pass it up because the Federal Government insures deposits up to $100,000 to dissuade runs on the fractional reserve system. As more depositors choose this bank for the high yield, other banks are forced to do the same thing to compete or lose all their business to this bank. Yeah, you see where this is going.

Here's something else that led to an abandonment of lending standards:

http://en.wikipedia.org/wiki/Community_reinvestment

Basically, in the name of social progress, a bored congress one day decided to pass a bill that forced banks to make loans to extremely low income people. Apparently, the government felt that banks were discriminating or something by having lending standards at all. You can't make this stuff up if you tried. This stuff has ALL of its roots in government backstops and interventions, not spontaneous evolution of man becoming more greedy.

But yes, they should certainly be enforcing laws against the infringement of rights (which derive from property) and providing courts. The constitution would be a good start. *ba-doom boom ching*