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Monday, October 10, 2011

Regulation versus fear of regulation

I am a Libertarian.
I dislike the idea of big governments.
I dislike the idea of the waste generated by bureaucracy.
I dislike the idea of rigid rule structures that CANNOT meet all the unique circumstances among the population.
I hate the idea of loopholes in rule structures that allow people to go free.
I believe that the larger the government, the worse things are for the people governed.

All of that said I can truly say that there is one thing I fear more than large government and that is the complete lack of government at all.

This is because the complete lack of government allows for the total and complete exploitation of the people by any powerful entity. That entity could be an individual, it could be a violent gang of thugs or it could be a large, multi-national corporation.

The one thing that government is truly excellent at is generating fear among the corporations under its control. This is because the giant, unwieldy nature of governmental regulation is terrifying to any organization that wants to earn money. The larger the government the more terrifying the thought of it regulating your business. The more technically-based the company the more terrifying the slowness of government regulation is.

The LAST thing companies want is for governmental regulators casting their eyes in the direction of the industry that a particular company works within. The way most industries avoid government regulation is to self-regulate. They operate under the philosophy that they may misbehave to a specific line but if they step over that line their freedom to operate will be impinged greatly through forced rules by the government. This is the reason that companies are so completely against "Net Neutrality" regulations by the government. This is the reason that the MPAA has a ratings board to rate movies. This is the reason that the video game industry has a self-ratings system.

This system works well to minimize the exploitation of customers by companies through fear of the government. What happens when this fear is not present? Economic crisis.

Each and every time there have been insufficient governmental controls on the banking and finance industry the end result has been economic chaos. The result is that the bottom 99% of the population end up losing more and more of the money that represents their hard work and the rich become even richer. Each and every time the government has failed to act on this particular industry's failure to self-govern the people who are crushed under the weight of the industry leaders' incomes are impoverished.

This is the cause of the financial crisis that launched the Dark Ages (Italy, 1300s), this is the cause of the French Revolution. This is the cause of the recent Icelandic revolution. This is the cause of Occupy Wall Street.

Is the fix governmental regulation? I hope not because that will take nearly as much capital away from the middle class but, instead of depositing it into the pockets of the top 1% it will grind it away in the inefficient bureaucracy of the regulations.

A far more effective tool to manage the financial industry would be the true and complete fear of governmental regulation. We need to generate a situation where the fear of governmental regulation is so terrifying that the people in charge of the financial industry actually behave themselves and treat their customers with some modicum of respect and fairness. I believe it would be great if the regulations presented ideas to the effect of wronged parties are compensated for and the bankers who did the wronging were bankrupted in the process. I am certain that this would strike fear into the hearts of the financial industry's leaders; fear great enough to avoid such regulations from being enacted.

What's the benefit of generating more government? Safety from greedy corporations? What is the drawback? Greedy politicians and terrible waste.

The fix for the greedy politicians is to craft a government where, by design, the politicians are afraid of the people they serve rather than the other way around and for the same reasons that the corporations should fear the government.

What keeps the population in line if the government fears them? The fear that the government won't always fear them.

The fear chain in society should look like this:

Corporations fear the government which fears the people. The people fear losing their livelihoods, financial independence and freedom.

The government can destroy any of the things the people should fear and corporations can destroy two of those things. There needs to be no action on the part of either a corporation nor the government to enhance and increase those fears. The very idea of a governing body should generate the fears automatically.

So, people sacrifice the complete freedom and independence for the protections against bullying entities and, in exchange they have a government. The government needs to heed its people in exchange for its survival and it's job is to protect the people whom it should fear.

It is a simple system. Perhaps too simple, perhaps not.

A system based on checks and balances of fear might work far better than anything we have in service today.

What we have today is a system where many key people in the government are tied to the wealth generated by the financial system. The financial system does not fear the government because the people in the government benefit too greatly from the existing financial system.

The change that Occupy Wall Street is clamoring for revolves around the imbalance created by these ties.

The change is coming; the question is in what form will it arrive? Hopefully the government and financial industries will awaken to realize that they are both in danger if they don't change to serve the majority of the people rather than the minority.

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