Finely Cultured

It’s the Enforcement, Stupid.

Thursday, 12. 25. 2008  –  Category: Economics, Featured  –  No Comments

Three months into the financial collapse, much of the debate is centering around the role of regulation in the crisis. Democrats are claiming the deregulatory atmosphere in Washington over the last 8 years caused much of the fraud and other criminal behavior that’s come to light. Republicans are arguing that the push for low-income home ownership and the expansion of Fannie Mae and Freddie Mac caused the subprime housing bubble. In the balance lies the layout of whatever eventual fiscal stimulus should pass: Will it be a market-centric solution, focusing on tax breaks and consumer spending, or an infrastructure-centric solution, focused on government spending and programs?

Ultimately, though, regulation was never the cause of the crisis. The question of “too much” or “too little” is moot - More after the jump.