“No significant deregulation of financial institutions occurred in the last 30 years”

This from a dissenting view (PDF) to the Report of the Financial Crisis Inquiry Commission, by Peter Wallison — a fellow of the (wait for it…) American Enterprise Institute.

The depths of Republican self-delusion continue to be nothing short of breathtaking, even awe-inspiring in their magnificence.







6 responses to ““No significant deregulation of financial institutions occurred in the last 30 years””

  1. jazzbumpa Avatar

    I just looked at your Musings on Efficient Market Theory link.

    I think the comment on herding behavior is spot on. It’s also distilled Elliott Wave Theory.

    EMT is bogus, through and through.

    It was pretty amusing, back in ’87 watching the EMT crowd try to spin a story that matched reality.

    The dot.com bust should have killed it. The housing bubble should have killed it. But it’s on of the zombie ideas (a la Krugman) thatwon’t stay in the grave.

    I think the underlying hypothesis that people are rational actors who seek to maximize utility is totally inconsistent with human behavior and psychology.


  2. Asymptosis Avatar

    All true. But as I said in those musing, I think it’s important to differentiate between two things — one of which is obviously false, but the other of which is at least potentially plausible, or even true to a fair degree.

    1. Individuals are rational actors
    2. In aggregate, individuals’ actions effect the market as if they were all rational actors.

  3. nanute Avatar

    So tell me, which one of the two possibilities is potentially plausible? Is it number 1 or 2? I’m guessing it is number 2. The key to the statement is in the “as if they were all rational actors.” As if being the critical point, in my view. As they say, perception is reality. True or not.

  4. Asymptosis Avatar

    @nanute: #1 is obviously false. The idea being that a bunch individuals who act in one way result in a system that is quite otherwise. But again, see the wisdom of the crowds post re: systematic/non-systematic irrationality.