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- Republican Advocated for Unregulated Markets
- By Byron A. Ellis-September 17, 2008
Republicans often advocate for unregulated free markets; they argue that regulation, even safety and environmental regulation, is costly. For instance, in December of 2000, Senator Phil Gramm tacked on a 262-page amendment, known as the Commodity Futures Modernization Act, to the 11,000-page government re-authorization bill.
According to Gramm, the amendment would be a watershed, where Congress turned away from outmoded depression-era financial regulation. Today, it appears that depression-era regulation is what the financial system needed.
Gramm is one of McCain top financial advisors and has served as co-chair of his 2008 campaign. However, Gramm watershed amendment has created financial chaos.
Like Gramm, McCain has been an advocate of less regulation. Chris notes that McCain used his influence to avoid regulators from investigating Charles Keaton in the Savings and Loan financial debacle which cost taxpayer more than 2 billion dollars.
Apparently, giving the current financial crisis and the political consequence of deregulation, McCain has reversed is position on de-regulation, see http://www.youtube.com/watch?v=Q0a6aGa1CoE. Some commentators noted that it took less than an hour for the “straight talker” to flip-flop.
McCain has flooded the media with the idea that he is for regulation. No wonder, even conservatives are concern that his distortion has gone too far. McCain appears to be running against his party and his own views.
Robert Scheer also noted that the current mortgage problems are tied to the Republican-deregulated markets. However, some Republicans are attempting to blame Bill Clinton who signed the 11,000-page government re-authorization bill that included Gramm’s “watershed amendment.”
Appropriate regulation creates efficient markets by allowing investors and consumers to make well-informed decisions. A good regulatory system is endowed with transparency of information and price. Moreover, in many instances regulation reduces transaction cost. Benjamin Zycher noted that regulation of electric rates have reduced consumer cost during peak periods.
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