Keep An Open Mind to New Regulation

October 23, 2009 by · Leave a Comment
Filed under: Bond Regulation 

We’ve all read Ayn Rand. She paints a pretty picture of individual rights, property rights and laissez-fair capitalism all enforced by limited government.

But if you read Rand, you must also read history. Particularly American history of the late 19th and early 20th centuries when Ayn Rand’s fiction was reality.

A century ago, not only did the economy go through staggering depressions, culminating in the 1930’s Great Depression, but there was also grinding poverty, staggering wealth and little in between. Violent crime, social unrest and political extremism all resulted.

Regulation, tax policies and social programs started by Franklin D Roosevelt and carried forward into the ‘60s helped to provide for a more stable economic climate, gave birth to the great middle class, and helped make the US the healthiest, best – educated and wealthiest nation on earth.

But for the last 30 years, the pendulum has swung the other way, and  American taxes and regulation have been treated as a hindrance to commerce. To compete in a world market, it was argued, we need looser business practices. Unfortunately we’re honoring the first anniversary of the greatest financial collapse since the last time Ayn Rand’s philosophy was the principle guiding business.

How much and what regulation and taxation should now be introduced or reintroduced? There is a huge range of economic models between Ayn Rand’s world and a structured economy. We need to find the mid point where the economy can stabilize, the middle class can thrive and business can excel. Sensible new regulation can help get us there. But an admission that some misguided government policies caused this bubble would be an honest starting point.

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