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Byron Dorgan on Derivatives in 1994
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Contributor | ArmyDem |
Last Edited | ArmyDem Mar 26, 2009 08:41am |
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Category | Blog Entry |
News Date | Thursday, March 26, 2009 02:00:00 PM UTC0:0 |
Description | This 15 year-old Washington Monthly cover story by Senator Byron Dorgan warning of the dangers of the underregulated derivatives sectors sure does make for interesting reading.
That said, it’s still not entirely clear to me that the rules we had on the books during the 2001-2007 upswing were actually inadequate to the problem. They weren’t a self-enforcing mechanism to keep us out of trouble, but no set of rules on a complicated subject would be. They required human agency to work. And the vast majority of the human agents were in the grips of a neoclassical economic theory that told them that the operations of the private market couldn’t be problematic in this way and that any market failures that might have existed were surely trivial compared to the problems that would be created by government intervention. That theory’s wrong, but it’s hard to see how any ship of state piloted by people holding those beliefs could possibly have steered clear of the shoals. |
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