March 10, 2009

You Gotta Keep ’em Regulated

If I handcuff a child, they will no longer be able to burn their hand on the stove. But, neither will they be able to paint or play a musical instrument. The benefits of regulation are to prevent risk. The downside of regulation is preventing growth. While some types of regulation may have prevented the ridiculously bad investments that have led to this recession, enstating new regulations now should be treated with great reservation. The current goal of the stimulus package is to open up the credit markets again. Making it even harder for people to obtain loans would do just the opposite.