Different Regulations=same ole problems

The Obama administration, just like any other great political administration, is taking proactive steps in fixing the financial system in our nation. To put in context, the economy is in a serious recession that began under the Bush administration and is continuing even through the stimulus era of increased government spending. I have already explained why I hate stimulus packages whether put together by Republicans or Democrats in past posts. But today the administration is going to fix the problems with more centralized regulation.

I have not read the full details but instead of having many different regulatory agencies, the federal reserve and the Treasury Secretary will have ultimate power on regulation. No more doubt on who has the power to punish people for making bad loans. Actually that sentence should be written "reward people for making bad loans and punishing those who do not." The reason being is that government regulators require a bank to make a certain amount of loans to people whom that political party or government official might want to make happy.

In reality we need less regulation and quite nearly none whatsoever. I take that back we need the most efficient regulation of all time. That being the regulation that the free market naturally puts on banks. If banks make bad risky loans to people who can not repay them, the government does not bail them out or help. The bank loses as well as the borrower. If government would stop forcing or pressuring financial institutions to make risky loans, and secondly stop giving them safety nets, then financial institutions will make decisions that would only benefit them. Which is- make good loans at affordable interest rates so they can compete with other loaning institutions while not making lots of risky loans to people who will not be able to repay them. Will fewer people be able to buy a house? The answer is yes. The percentage will lower by a couple at most few percentage points in the long run. The good news is you don't have a artificially inflated markets that causes inflation of home values and then a drop that bottoms out to a point where every persons property and house's value dissipates. Thus causing the entire economy to go into a recession of not depression.

Solution: Federal Government do only what the Constitution gives you authority to do. Meaning only about 35% of what you currently do. Furthermore, allow states to set whatever laws and regulations they want. I believe within a few years states that let the free market work will see its people and companies flourishing with prosperity. Then other states will follow suit and our entire nation will use the system that works best. Very light regulation, strong laws though, with free markets doing most of the regulation. Instead we have one giant fascist federal government making a mockery of the Constitution of the United States.