Quote of the Day - On Regulation

Comes from Aaron M. Brown, a somewhat obscure blogger who works in IT somewhere north of my locale. In critiquing a Tim Harford talk, he had this to say; which succinctly sums up everything I have thought about regulation.

I have two interrelated quibbles with Harford’s talk. One is that, despite Harford citing several instances in which regulators made dangerous situations worse, not better, his axiomatic position is that it is regulators that will prevent crises in the future. I think this is a deeply flawed position, since regulation and regulators have an incredibly poor track record with regards to various kinds of crises. (Not only did they not prevent the global financial meltdown, they also provided many of the conditions that fostered it. They were also definitely responsible for the real estate crisis in the US that lit the fuse on the whole unhappy incident. Which is to say nothing of the fact that there’s good evidence that they’re actually slowing the recovery and prolonging the economic pain.)

Regulation is a poor substitute for losing your ass and all your assets when you screw up royally.

BTW, I love the name of his blog, "Magic Blue Smoke," even if I'm not yet sure what it means.