Fant: "Economists say that the "blend" you describe, and the manner in which it was injected into the gears of business has almost always resulted in a recession or depression."....What kind of additional controls and regulation (same thing, really) would have prevented the Enron and Tyco debacles? As I recall, it was independent auditors, who were supposed to expose irregularities who were either asleep at the switch, or worse.
Persons who, in the privacy of their offices and boardrooms, conspire to commit fraud are much the same as those who plan a bank robbery. Laws and regulations cannot prevent bank robberies; nor can they prevent corporate fraud. The only thing any law can do is punish those found guilty of violating it. As I noted in an earlier post, Arthur Andersen paid the ultimate price for it's greedy complicity.
You are usually very good at coming up with some source that supports your view, no matter how slanted it is. Which economic studies are you citing here? Show me which recessions were started as a result of government oversight of business practices.
What follows is an except from the URL shown below.
http://econ161.berkeley.edu/TCEH/Slouch_Crash14.html
The Great Crash
The U.S. stock market boomed in the 1920s. Prices reached levels, measured as a multiple of corporate dividends or corporate earnings, that made no sense in terms of traditional patterns and rules of thumb for valuation. A range of evidence suggests that at the market peak in September 1929 something like forty percent of stock market values were pure air: prices above fundamental values for no reason other than that a wide cross-section of investors thought that the stock market would go up because it had gone up.
By 1928 and 1929 the Federal Reserve was worried about the high level of the stock market. It feared that the "bubble" component of stock prices might burst suddenly. When it did burst, pieces of the financial system might be suddenly revealed to be insolvent, the network of financial intermediation might well be damaged, investment might fall, and recession might result. It seemed better to the Federal Reserve in 1928 and 1929 to try to "cool off" the market by making borrowing money for stock speculation difficult and costly by raising interest rates. They accepted the risk that the increase in interest rates might bring on the recession that they hoped could be avoided if the market could be "cooled off": all policy options seemed to have possible unfavorable consequences.
In later years some, Friedrich Hayek for one, were to claim that the Federal Reserve had created the stock market boom, the subsequent crash, and the Great Depression through "easy money"policies.
pp. 161-2: "up to 1927 I should have expected that the subsequent depression would be very mild. But in that year an entirely unprecedented action was taken by the American monetary authorities [who] succeeded, by means of an easy-money policy, inaugurated as soon as the symptoms of an impending reaction were noticed, in prolonging the boom for two years beyond what would otherwise have been its natural end. And when the crisis finally occurred, deliberate attempts were made to prevent, by all conceivable means, the normal process of liquidation."
Those making such claims for over-easy policy appear to have spent no time looking at the evidence. Weight of opinion and evidence on the other side: the Federal Reserve's fear of excessive speculation led it into a far too deflationary policy in the late 1920s: "destroying the village in order to save it."
The U.S. economy was already past the peak of the business cycle when the stock market crashed in October of 1929. So it looks as though the Federal Reserve did "overdo it"--did raise interest rates too much, and bring on the recession that they had hoped to avoid.
Are you saying that we should disban the SEC, IRS, FCC, ATF, DOE and all the other "regulatory" agencies in favor of an (I hate to say it) "anarchist" approach to business. Should we allow the corruption of even the biggest and most trusted auditors (Arthur Anderson etc) go unbrideled? They realized their client was paying over $1 million a month in fees... and they didn't want to risk losing the account. As with many situations in our wonderful country, the boys at Arthur Anderson tried to get around the law, and managed to do so because the SEC was too lazy or stupid to catch the accounting magic show. This was a major wake up call because it destroyed the lives of many people who lost everything in these stock collapses. Without agencies like the SEC PROTECTING the interests of the investors and the public, the human hardwired predisposition for greed would destroy the economy. THEN you would see depression and recession of Biblical proportion!
That is quite a talent you have. First you ask me a question. Then you give precisely the answer I would have given if you had permitted me to do so.
You stated: "To me, the Scandanavian system resembles a barnyard in which the animals are fed, watered, and tended, but are restricted to the place in the pecking order to which they were born."
It is obvious that you haven't been to any Scandanavian country lately. There is no "pecking order". There are no poor people. There is no underclass. Everyone is extremely well educated (through college FOR FREE). They have no healthcare crisis (it's FREE). No concerns about retirement or social security. They are far more independent in trade practices than the US or EU. They live longer than most and have consistently been recognized as the best place in the world in their care of women and children (you should like that). They are as capitalistic as they come (oil, shipping, technology etc). You should really take a closer look at this barnyard to see the "animals" are fat, happy and can do anything they damn well please.
Yes, they can do anything they damn well please, so long as they are content not to rise above the economic class to which they were born.
IN FACT (back to the topic...)
THEY HAVE FOUND A WAY TO ALMOST ENTIRELY ELIMINATE PROSTITUTION
(from
http://www.justicewomen.com/cj_sweden.html)
In a centuries deep sea of clichés despairing that 'prostitution will always be with us', one country's success stands out as a solitary beacon lighting the way. In just five years Sweden has dramatically reduced the number of its women in prostitution. In the capital city of Stockholm the number of women in street prostitution has been reduced by two thirds, and the number of johns has been reduced by 80%..............
In addition, the number of foreign women now being trafficked into Sweden for sex is nil. The Swedish government estimates that in the last few years only 200 to 400 women and girls have been annually sex trafficked into Sweden, a figure that's negligible compared to the 15,000 to 17,000 females yearly sex trafficked into neighboring Finland. No other country, nor any other social experiment, has come anywhere near Sweden's promising results.
By what complex formula has Sweden managed this feat? Amazingly, Sweden's strategy isn't complex at all. It's tenets, in fact, seem so simple and so firmly anchored in common sense as to immediately spark the question, "Why hasn't anyone tried this before?"
Sweden's Groundbreaking 1999 Legislation
In 1999, after years of research and study, Sweden passed legislation that a) criminalizes the buying of sex, and b) decriminalizes the selling of sex. The novel rationale behind this legislation is clearly stated in the government's literature on the law:.......................
"and the public is educated in order to counteract the historical male bias that has long stultified thinking on prostitution."
According to the following excerpt from the URL shown below, it would seem that, in Sweden, "There's many a slip twixt the cup and the lip."
http://www.ex.ac.uk/politics/pol_data/undergrad/aac/swed.htm
Population:
8.5 million
Number of prostitutes:
2,500
Of which migrant:
700
De Jure
Prostitution:
"Prostitution is legal but pimping, brothels and live sex shows are illegal"
Trafficking
Specific legislation outlaws trafficking, with a sentence of 1-2 years imprisonment
New legislation was introduced in January 1999 which criminalises the clients of prostitutes. Paying for or offering to pay for sex is now illegal, punishable by a fine (about US$ 1000-2000) or a maximum six-month prison sentence. Sweden is the only country that outlaws the buying but not the selling for sex.
The penalty for trafficking in human beings is no more than one or two years' imprisonment.
De Facto
"The [1999] law was introduced to stop the increasing influx of eastern European women coming to Sweden for the sex trade.
So far only two men have been charged with buying sexual services, and the number of prostitutes and clients is back to normal levels in the main cities of Sweden."
In Stockholm there has been a considerable increase in young women from the Baltic states and Russia on the streets. In Gothenburg the phenomenon concerns women from Poland, Hungary and Bulgaria.
So much for the socialist - lib - blah, blah, blah.....
Yep, so much for the blah, blah, blah......
