National Review Online
Barack Obama never misses a chance these days to allege that the financial crisis is due to the right-wing philosophy of deregulation, “a philosophy that views even the most common-sense regulations as unwise and unnecessary.” The charge is echoed by fellow Democrats such as House Speaker Nancy Pelosi.
They’re often unclear on specifics, and for a good reason: Not all deregulation hurts, and not all regulation helps. Republicans and Democrats alike supported a 1999 deregulation that has actually made this crisis easier to handle, for example. Also, Republicans have supported regulations that could have helped avert this problem, while the regulations Democrats enacted worsened it...
More recently, Obama has attacked McCain on deregulation by saying, “Senator McCain wrote that we need to open up health care to ‘more vigorous nationwide competition as we have done over the last decade in banking.’ That’s right, he wants to deregulate the insurance industry just like he fought to deregulate the banking industry. And we’ve all seen how well that worked out.” Obama is talking here about the deregulation to allow interstate banking, which McCain referenced in proposing interstate sales of health insurance. But the analogy actually supports McCain’s position: Interstate banking has been an unqualified success, strengthening banks and providing more competition and services for consumers. It has not contributed to the financial crisis as Obama implied.
The least regulated of our financial institutions, hedge funds, have fared the best in the current crisis.
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