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Who: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
Port: Lake Pleasant, AZ
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The Whys and Wherefores of Banking Messes

20 February 2015 | Pago Pago, American Samoa
Kimball Corson
A friend from South Africa observes, "Proper banking regulation can be implemented. Canada has had NO systematic banking crises since 1840, whereas the US has had 11. There is no substitute for rigorous rules for regulating banks, and professional regulators (that don't come from or go to the banking sector)."

I had a running argument with Milton Friedman, my mentor in economics. He argued regulation was destined to fail, especially in banking, because of "regulatory capture," the idea that regulators become of the captives of those they regulate. I researched and wrote a private paper for him explaining that was not true for the most part in several Scandinavian countries. His response was, 'Yes, but we live in the United States." My rejoinder was, 'True, but it doesn't have to be this way.'

In America, we are a lawless bunch. For all the laws on the books and the surplus of lawyers, you would think we could do better. But the truth is, even in the big law firms, there are far too few good lawyers who can litigate their way out of a paper bag and far too many state and federal agency influence peddlers. Courts could also do much better but have no sense of the public policy mission and are biased toward government.

Congress, well corrupted by money, as we all know, is the problem. It inadequately regulates lobbyists, the revolving door between regulatory agencies and the private sectors they regulate and the implicit promises made for good compensation and a new job upon leaving government next time. Effective oversight is squat. It is, I suggest, unrealistic to expect congress to do much, beholding as it is to those same lobbyists and their campaign contributing clients.

Clean up and good regulation will have to await serious campaign finance reform and a good flushing of the toilet that is Washington. But for how, the questions are how long can we afford to wait and can we really afford the costs of the resulting aperiodic banking messes and their impacts on the real economy.
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Vessel Name: Altaira
Vessel Make/Model: A Fair Weather Mariner 39 is a fast (PHRF 132), heavily ballasted (43%), high-aspect (6:1), stiff, comfortable, offshore performance cruiser by Bob Perry that goes to wind well (30 deg w/ good headway) and is also good up and down the Beaufort scale.
Hailing Port: Lake Pleasant, AZ
Crew: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
About:
Kimball Corson: I am a 75 year old solo sailor, by choice. However, I did take on a personable, but high maintenance female kitten, now a full grown cat, named KiKiPoo when she is sweet, or KatKatPo after she has just killed something like a bird or bat. [...]
Extra:
Although I was a lawyer and practiced law with good success for thirty years, creating significant new law, I never really believed in the law, the politics of law or in the over reaching self-interest of most lawyers I met. Too much exposure to Nietzsche and other good and seriously thoughtful [...]
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Profile

Who: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
Port: Lake Pleasant, AZ