Military mismanagement has put so many people on Guam that the island is going to tip over. It's going to tip over I tell you!!!!!
Wednesday, March 31, 2010
Monday, March 29, 2010
Ridicule v. Humor
It's amazing how many of the modern world's ills can be traced to the fallacy of projection.
I was sad to see the following tweet by ConservativeGal:
Yes, progressives have institutionalized the ridicule of all opposition. I reject the idea that those supporting freedom should resort to the same tactics.
ConservativeGal's post got me thinking about the difference between ridicule and good natured humor.
The difference is that ridicule is an act designed to project a negative image onto one's opponents. Good natured humor is about human foibles.
As ridicule tends to project false images, it is deceitful and tends to undermine discourse. In contrasts, good natured humor points out foibles and logical inconsistencies and helps people pursue a path of truth.
I suspect a large number of good things in this world started out as jokes, and with people finding a better path by easing up.
Conversely, I suspect that many of the bad things started from fear of ridicule, or are protected by rogues who use ridicule to protect their wrong doings.
If one wanted to develop a political strategy involving humor, I would suggest the following: One should use ridicule when one's opponents have a stronger set of policies. When one has a strong set of policies, one is better off resorting to good natured humor.
The Left has a collection of paradoxical and oppressive ideas. As such, the projection of false images through ridicule is the desired strategy.
Conservatives have a better set of logically consistent principles. As such, they do better engaging in good natured humor.
Humor makes life fun. It can draw people into discourse and create a welcoming environment where people feel open about thinking and exploring ideas. As humor encourages thinking, humor can lead to truth.
Ridicule, aimed at achieving political goals, is a base activity that closes minds and undermines discourse.
I was sad to see the following tweet by ConservativeGal:
Ridicule is man's most potent weapon.~Saul Alinsky Time to learn the rules of the game folks.
Yes, progressives have institutionalized the ridicule of all opposition. I reject the idea that those supporting freedom should resort to the same tactics.
ConservativeGal's post got me thinking about the difference between ridicule and good natured humor.
The difference is that ridicule is an act designed to project a negative image onto one's opponents. Good natured humor is about human foibles.
As ridicule tends to project false images, it is deceitful and tends to undermine discourse. In contrasts, good natured humor points out foibles and logical inconsistencies and helps people pursue a path of truth.
I suspect a large number of good things in this world started out as jokes, and with people finding a better path by easing up.
Conversely, I suspect that many of the bad things started from fear of ridicule, or are protected by rogues who use ridicule to protect their wrong doings.
If one wanted to develop a political strategy involving humor, I would suggest the following: One should use ridicule when one's opponents have a stronger set of policies. When one has a strong set of policies, one is better off resorting to good natured humor.
The Left has a collection of paradoxical and oppressive ideas. As such, the projection of false images through ridicule is the desired strategy.
Conservatives have a better set of logically consistent principles. As such, they do better engaging in good natured humor.
Humor makes life fun. It can draw people into discourse and create a welcoming environment where people feel open about thinking and exploring ideas. As humor encourages thinking, humor can lead to truth.
Ridicule, aimed at achieving political goals, is a base activity that closes minds and undermines discourse.
The Rationality of Others
There are two important sides of rationality:
The first is for one to learn to understand and define one's own actions.
The second is to learn to appreciate the rationality of others.
Because each of us has our own unique minds filled with slightly different understanding of definitions and premises, there will always be misunderstandings and logical inconsistencies in discourse.
As such, I believe that one of the greatest acts of love and kindness is to openly appreciate the rationality of others.
One of the most base acts of hostility is to deny the rationality of others with hostile labels such as "wingnut."
The first is for one to learn to understand and define one's own actions.
The second is to learn to appreciate the rationality of others.
Because each of us has our own unique minds filled with slightly different understanding of definitions and premises, there will always be misunderstandings and logical inconsistencies in discourse.
As such, I believe that one of the greatest acts of love and kindness is to openly appreciate the rationality of others.
One of the most base acts of hostility is to deny the rationality of others with hostile labels such as "wingnut."
Projection of Irrationality is Irrational
One of the games in propaganda is for the propagandist to project rationality onto his opponents and reason onto his followers.
This projection false images is, itself, a rather base and vile fallacy. Although the propagandist invests a great deal of effort into sculpting a self image of a rational creation, the propagandist engaged in projection is engaged in an irrational activity.
Anyway, I just watched a Book TV interview in which a wingnut named John Avlon projected the label "wingnut" on the people he dislikes.
His notion is that the body politic is being ripped assunder by the radicals on the extreme, failing to realize that people who play the middle against the end can be as bad as those who play the middle against the end.
I've repeated multiple times that the left/right dichtomy is a an artificial contrivance. Just as the conflict is a contrivance, the center is also a piece of fiction. Many of the most manipulative and dangerous people are those who stake their position in this mythical center and engage in the act of manipulating the ends by projecting false images.
I have little interest in reading a book by a wingnut who seeks influence by projecting the negative label of "wingnut" on people he dislikes. I tossed in an Amazon link on this post as Google added a fun amazon link generation thingy to blogspot.
This projection false images is, itself, a rather base and vile fallacy. Although the propagandist invests a great deal of effort into sculpting a self image of a rational creation, the propagandist engaged in projection is engaged in an irrational activity.
Anyway, I just watched a Book TV interview in which a wingnut named John Avlon projected the label "wingnut" on the people he dislikes.
His notion is that the body politic is being ripped assunder by the radicals on the extreme, failing to realize that people who play the middle against the end can be as bad as those who play the middle against the end.
I've repeated multiple times that the left/right dichtomy is a an artificial contrivance. Just as the conflict is a contrivance, the center is also a piece of fiction. Many of the most manipulative and dangerous people are those who stake their position in this mythical center and engage in the act of manipulating the ends by projecting false images.
I have little interest in reading a book by a wingnut who seeks influence by projecting the negative label of "wingnut" on people he dislikes. I tossed in an Amazon link on this post as Google added a fun amazon link generation thingy to blogspot.
Sunday, March 28, 2010
The United States is a Liberal Nation
The United States is a liberal nation. The founders of this country fought and died for freedom. The founders were unified in a struggle for liberty. They were liberals at their finest.
Today, liberalism often has a negative tone. The reason is that there is a big difference between the liberalism of the founders and liberalism today.
The Founders had a refined classical education that esteemed logic and science. They applied classical logic to the concept of liberty and came up with a rather unique philosophy that I like to call "classical liberalism."
The French Revolution followed the US Revolution. This revolution was driven by a demand for social change. This revolution had a split between left and right, with the left supporting social change and right resisting it. The revolution broke down into genocide and ended with the rise of a totalitarian empire run by Napoleon.
The French Revolution is the source of the current left/right split that dominates American politics.
The destruction of Napoleon made a new alliance between England and Germany supreme.
With thoughts of social change in the air, German Intellectuals created a new logic of social change through the writings of Kant, Hegel and Marx. The ideologies from Kant forward are often called "Modernism."
Having a logic of social change opens the hope that an intelligentsia could influence and guide social change. This new ideology has social change taking place though a system of thesis/anti-thesis conflicts that resolve in a catharsis. The catharsis is often a revolution or war. Progressives adopted this modern philosophy but seek evolutionary change in lieu of revolutionary change.
The paradigm of modern America is that progressives believe that they can engineer change through conflict. One simply manipulates the conflict and rises to power.
The intelligentsia positions American politics as a simple conflict between left and right…with open-minded liberals on the left, and evil closed-minded conservatives on the right.
This system ruled by a single partisan conflict is a fantasy. In reality, we have an extremely complex system with ideas operating on multiple levels.
The intelligentsia (which often calls itself progressive) has operatives in both the Liberal and Conservative camps. This group flames the contrived conflicts and rises to power. The result is that we find our liberties diminished under both groups.
The artificial conflict between left and right is a greater threat to liberty than either of the two political camps created by the division, as the false dichotomy allows the enemies of freedom to create a structure that progressively restricts individual rights.
The Constitution put enough roadblocks to temper bad legislation that we were able to get by with partisan politics and still remain free. Unfortunately, we've reached a point in the erosion of Constitutional protections that people will have to get over the contrived division between Conservative and Liberal if we wish to retain the classical liberal tradition that made the United States a great nation.
The United States is a liberal nation. To preserve our liberal heritage, we need the lovers of freedom in both the "Conservative" and "Liberal" camps to unite against the intelligentsia (progressives) who are manipulating definitions and eroding our freedoms by deceit.
There are defenders and enemies of freedom in both political camps. Only through a dual commitment to quality reasoning and freedom can we root out the problem.
Today, liberalism often has a negative tone. The reason is that there is a big difference between the liberalism of the founders and liberalism today.
The Founders had a refined classical education that esteemed logic and science. They applied classical logic to the concept of liberty and came up with a rather unique philosophy that I like to call "classical liberalism."
The French Revolution followed the US Revolution. This revolution was driven by a demand for social change. This revolution had a split between left and right, with the left supporting social change and right resisting it. The revolution broke down into genocide and ended with the rise of a totalitarian empire run by Napoleon.
The French Revolution is the source of the current left/right split that dominates American politics.
The destruction of Napoleon made a new alliance between England and Germany supreme.
With thoughts of social change in the air, German Intellectuals created a new logic of social change through the writings of Kant, Hegel and Marx. The ideologies from Kant forward are often called "Modernism."
Having a logic of social change opens the hope that an intelligentsia could influence and guide social change. This new ideology has social change taking place though a system of thesis/anti-thesis conflicts that resolve in a catharsis. The catharsis is often a revolution or war. Progressives adopted this modern philosophy but seek evolutionary change in lieu of revolutionary change.
The paradigm of modern America is that progressives believe that they can engineer change through conflict. One simply manipulates the conflict and rises to power.
The intelligentsia positions American politics as a simple conflict between left and right…with open-minded liberals on the left, and evil closed-minded conservatives on the right.
This system ruled by a single partisan conflict is a fantasy. In reality, we have an extremely complex system with ideas operating on multiple levels.
The intelligentsia (which often calls itself progressive) has operatives in both the Liberal and Conservative camps. This group flames the contrived conflicts and rises to power. The result is that we find our liberties diminished under both groups.
The artificial conflict between left and right is a greater threat to liberty than either of the two political camps created by the division, as the false dichotomy allows the enemies of freedom to create a structure that progressively restricts individual rights.
The Constitution put enough roadblocks to temper bad legislation that we were able to get by with partisan politics and still remain free. Unfortunately, we've reached a point in the erosion of Constitutional protections that people will have to get over the contrived division between Conservative and Liberal if we wish to retain the classical liberal tradition that made the United States a great nation.
The United States is a liberal nation. To preserve our liberal heritage, we need the lovers of freedom in both the "Conservative" and "Liberal" camps to unite against the intelligentsia (progressives) who are manipulating definitions and eroding our freedoms by deceit.
There are defenders and enemies of freedom in both political camps. Only through a dual commitment to quality reasoning and freedom can we root out the problem.
Saturday, March 27, 2010
Ending the Agitation Cycle
ObamaCare was a bad bill passed through a poisonous process.
It is nigh impossible to properly develop a positive idea in such a poisonous climate. As there was some hope that Congress would consume itself before passing the bill, I put off writing The Medical Savings and Loan aside and concentrated on the ugly process of agitation against the bill.
Proponents of liberty have a big problem and a small opportunity.
ObamaCare is such a bad bill and people are so upset that it might be possible to repeal the monstrosity.
Repealing the bill will take more than base agitation. Repealing the bill will require developing a better solution to health care than ObamaCare and the corrupt system of employer based solution.
The patient-centric Medical Savings and Loan is just such a reform. The medical savings and loan builds the health system around the individual. The program encourages people to engage in better financial planning. As such, the program has the potential to become a positive economic force.
Anyway, I will do some rewriting on the proposal. Of course, to really get the program rolling, I need a little bit of help from somewhere.
What I am developing would be a very strong tool for any group wishing to restore health care freedom in America. Please contact me if your group is interested in such an effort.
It is nigh impossible to properly develop a positive idea in such a poisonous climate. As there was some hope that Congress would consume itself before passing the bill, I put off writing The Medical Savings and Loan aside and concentrated on the ugly process of agitation against the bill.
Proponents of liberty have a big problem and a small opportunity.
ObamaCare is such a bad bill and people are so upset that it might be possible to repeal the monstrosity.
Repealing the bill will take more than base agitation. Repealing the bill will require developing a better solution to health care than ObamaCare and the corrupt system of employer based solution.
The patient-centric Medical Savings and Loan is just such a reform. The medical savings and loan builds the health system around the individual. The program encourages people to engage in better financial planning. As such, the program has the potential to become a positive economic force.
Anyway, I will do some rewriting on the proposal. Of course, to really get the program rolling, I need a little bit of help from somewhere.
What I am developing would be a very strong tool for any group wishing to restore health care freedom in America. Please contact me if your group is interested in such an effort.
Compromise and Statesmanship
The Republican tradition is driven by the concept of the elected official as statesman. The statesman faces the challenges of the state with principle, character and compromise.
The early American founders were not keen on the role that ideology played in the French Revolution. They were proud in their ability to take the diversity of ideas from the thirteen colonies and develop working compromises that balanced legitimate concerns.
This ability to reach compromise strengthened our nation. There is, however, one unfortunate weakness to the strategy. Once people know that statesmen are actively engaged in the process of compromise, rogues will generate artificial conflicts with the hope of molding compromises that suited their end.
To an extent, progressivism is a strategy for manipulating the statesman's desire to find working compromise.
The modern progressives seek to evolve our nation into a socialist state through a progression of baby steps. The process is remarkably easy. One agitates against the status quo, laying blame for all societal ills on the free market.
The statesman legislator, anxious to employ diplomatic skills, will reach a compromise that restricts that restricts compromise. A good statesman will then argue for the compromise. In the economic debate, a statesman will highlight whatever free market provisions are in the bill.
Rather than defending the compromise, progressives will use the speech of the statesman to frame the new status quo as the free market. They will then start a new agitation campaign against all of the ills of the compromise.
A great example of this is employer based insurance. Employer based insurance was touted a generation ago as the answer to all of the ills of the free market. It was the creation of progressives of yesteryear. The statesmen of yesteryear compromised with the progressives and made employer based insurance the norm.
Despite the anti-market nature of employer based insurance, the current generation has forgotten the origins of insurance allowing progressives to frame insurance as the free market and that more government control is needed to overcome the flaws of the free market.
This process takes place on a generational level. People simply do not have a memory that spans longer than their life time. If one can control the education system, then the game works.
Progressivism is a strategy designed to manipulate the compromise process. The fact that the left has chosen to use the strategy of progressivism to advance socialism has placed our nation in a terrible position. The spirit of compromise cannot work unless all of the parties involved in the compromise are committed to the compromise.
Don't you see the problem? By definition, progressives will not commit to a compromise. Each compromise is a step in a progression, undermining the ability to mediate with compromise.
Those seeking to preserve liberty must find a different approach than compromise. Unfortunately, other approaches create too much division.
The best approach I can imagine demands that lovers of liberty spend a lot of time studying history to help lengthen our collective memory and to engage in a discourse that points out the inherent duplicity and underhanded nature of progressivism.
When a person declares their allegiance to the strategy of progressivism, they are declaring themselves opposed to the tradition of statesmanship and spirit of compromise that was foundational to this nature.
The current state of things poses great challenge to leaders dedicated to statesmanship. Times of poisoned process require a greater dedication to truth and principles than to process.
The early American founders were not keen on the role that ideology played in the French Revolution. They were proud in their ability to take the diversity of ideas from the thirteen colonies and develop working compromises that balanced legitimate concerns.
This ability to reach compromise strengthened our nation. There is, however, one unfortunate weakness to the strategy. Once people know that statesmen are actively engaged in the process of compromise, rogues will generate artificial conflicts with the hope of molding compromises that suited their end.
To an extent, progressivism is a strategy for manipulating the statesman's desire to find working compromise.
The modern progressives seek to evolve our nation into a socialist state through a progression of baby steps. The process is remarkably easy. One agitates against the status quo, laying blame for all societal ills on the free market.
The statesman legislator, anxious to employ diplomatic skills, will reach a compromise that restricts that restricts compromise. A good statesman will then argue for the compromise. In the economic debate, a statesman will highlight whatever free market provisions are in the bill.
Rather than defending the compromise, progressives will use the speech of the statesman to frame the new status quo as the free market. They will then start a new agitation campaign against all of the ills of the compromise.
A great example of this is employer based insurance. Employer based insurance was touted a generation ago as the answer to all of the ills of the free market. It was the creation of progressives of yesteryear. The statesmen of yesteryear compromised with the progressives and made employer based insurance the norm.
Despite the anti-market nature of employer based insurance, the current generation has forgotten the origins of insurance allowing progressives to frame insurance as the free market and that more government control is needed to overcome the flaws of the free market.
This process takes place on a generational level. People simply do not have a memory that spans longer than their life time. If one can control the education system, then the game works.
Progressivism is a strategy designed to manipulate the compromise process. The fact that the left has chosen to use the strategy of progressivism to advance socialism has placed our nation in a terrible position. The spirit of compromise cannot work unless all of the parties involved in the compromise are committed to the compromise.
Don't you see the problem? By definition, progressives will not commit to a compromise. Each compromise is a step in a progression, undermining the ability to mediate with compromise.
Those seeking to preserve liberty must find a different approach than compromise. Unfortunately, other approaches create too much division.
The best approach I can imagine demands that lovers of liberty spend a lot of time studying history to help lengthen our collective memory and to engage in a discourse that points out the inherent duplicity and underhanded nature of progressivism.
When a person declares their allegiance to the strategy of progressivism, they are declaring themselves opposed to the tradition of statesmanship and spirit of compromise that was foundational to this nature.
The current state of things poses great challenge to leaders dedicated to statesmanship. Times of poisoned process require a greater dedication to truth and principles than to process.
Friday, March 26, 2010
A Network of Legislatures
I just dropped a comment on André Bauer's call for a Constitutional Convention.
The problem isn't simply ObamaCare, but the desire of political groups to steal power from other political groups.
Prior to ObamaCare, the 50 states regulated health care. ObamaCare simply grabbed this authority from the state's without even token acknowledgement of the state's existence. This type of power grab is not healthy. The unfunded mandates of Bush's No Child Left Behind Act was the same thing.
The problem is not with one party. It is with the current structure of things.
The Founders of the United States were not seeking to create legislatures that worked in isolation against each other.
They sought to create a network of legislatures that balanced and enhanced each other.
For this reason, the Founders of the United States had the Senate elected by the state legislature.
Yes, this structure created corruption. In seeking to reduce the corruption, the 17 Amendment broke the network, and eliminated the ability of atates to defend their rights and the rights of their citizens as written in the 10th Amendment.
The Founders did not have advanced communication technology.
Communication technology opens the opportunity of creating a direct network of legislatures.
Imagine a network of terminals in each state capitol allowing formalized communication between the state and federal government. This network would allow the states to influence Congress. As communication is two way, the Federal Government would be better equipped to coordinate legislation with the states.
A Constitutional Amendment aimed at creating a network of legislatures would profoundly improve the quality of legislation in our republic. (See An Unconventional Convention for my first post on this topic.)
The problem isn't simply ObamaCare, but the desire of political groups to steal power from other political groups.
Prior to ObamaCare, the 50 states regulated health care. ObamaCare simply grabbed this authority from the state's without even token acknowledgement of the state's existence. This type of power grab is not healthy. The unfunded mandates of Bush's No Child Left Behind Act was the same thing.
The problem is not with one party. It is with the current structure of things.
The Founders of the United States were not seeking to create legislatures that worked in isolation against each other.
They sought to create a network of legislatures that balanced and enhanced each other.
For this reason, the Founders of the United States had the Senate elected by the state legislature.
Yes, this structure created corruption. In seeking to reduce the corruption, the 17 Amendment broke the network, and eliminated the ability of atates to defend their rights and the rights of their citizens as written in the 10th Amendment.
The Founders did not have advanced communication technology.
Communication technology opens the opportunity of creating a direct network of legislatures.
Imagine a network of terminals in each state capitol allowing formalized communication between the state and federal government. This network would allow the states to influence Congress. As communication is two way, the Federal Government would be better equipped to coordinate legislation with the states.
A Constitutional Amendment aimed at creating a network of legislatures would profoundly improve the quality of legislation in our republic. (See An Unconventional Convention for my first post on this topic.)
Thursday, March 25, 2010
On the Smart Grid
In the early days of our electronic age, there was a large number of independently owned energy providers that produced energy from a variety of sources. This was especially true in rural areas.
The monolithic utility system that currently dominates the United States was the creation of Franklin Delano Roosevelt. The utility monopolies were created to regulate energy. The term regulate means "to make regular."
Regulation means driving all the irregular sources of alternative energy out of business ... which is precisely what FDR did.
Don't you see it? The reason America is dependent on one source of energy is the efforts of progressives-past to regulate energy.
America would already have a smart grid if independent energy producers were not locked out of the market by progressives.
Just as progressives created our horrible employer based insurance system. Pogressives created the public utility industry that dominates the energy market.
The stated goal of the smart grid is to create mechanisms to allow alternative fuel industries access to the grid so they can sell to consumers. It is supposed to help smarter energy usage by charging different rates for peak hour usage.
The political reality is the Democrats want to use the legislation to install political operatives in the market and to engage in the Machiavellian act of rewarding friends and punishing enemies.
Despite the fact that politics is politics, Conservatives would be wise to actively support the smart grid effort and to promote any free market aspects of the bill.
Unlike health care reform, which was an open attempt to reduce freedom, the smart grid legislation is overcoming one of the worst legacies of the FDR era ... the monopoly of public utilities.
I hope Conservatives actively engage in and promote all free market eliments of the bill while openly challenging the corruption that seeks to feed energy contracts into the pockets of the Democratic billionaires who seek to create a corrupted smart grid.
The monolithic utility system that currently dominates the United States was the creation of Franklin Delano Roosevelt. The utility monopolies were created to regulate energy. The term regulate means "to make regular."
Regulation means driving all the irregular sources of alternative energy out of business ... which is precisely what FDR did.
Don't you see it? The reason America is dependent on one source of energy is the efforts of progressives-past to regulate energy.
America would already have a smart grid if independent energy producers were not locked out of the market by progressives.
Just as progressives created our horrible employer based insurance system. Pogressives created the public utility industry that dominates the energy market.
The stated goal of the smart grid is to create mechanisms to allow alternative fuel industries access to the grid so they can sell to consumers. It is supposed to help smarter energy usage by charging different rates for peak hour usage.
The political reality is the Democrats want to use the legislation to install political operatives in the market and to engage in the Machiavellian act of rewarding friends and punishing enemies.
Despite the fact that politics is politics, Conservatives would be wise to actively support the smart grid effort and to promote any free market aspects of the bill.
Unlike health care reform, which was an open attempt to reduce freedom, the smart grid legislation is overcoming one of the worst legacies of the FDR era ... the monopoly of public utilities.
I hope Conservatives actively engage in and promote all free market eliments of the bill while openly challenging the corruption that seeks to feed energy contracts into the pockets of the Democratic billionaires who seek to create a corrupted smart grid.
Tuesday, March 23, 2010
Insured Trading
As I understand, a major overhaul of financial regulation is one of the next items on Obama's social agenda. The theme of the reforms is that greedy investors took unnecessary risks and that we need the oppressive weight of big government on business to prevent risk taking.
The actual history of business is that risk taking leads to innovation which leads to better products and a higher quality of life.
I reject the partisan theme that risk taking is the problem. The question is the form of the risk taking.
A little known fact is that, for the last decade, the financial markets have been influenced by a little known 10,000 page piece of legislation passed in the lame duck session of the Clinton Administration called "The Securities Modernization Act of 2000."
This 10,000 page regulation is often called "deregulation." The regulation creates a slew of derivatives dreamed up in the University that were supposed to help banks and hedge funds control their risks.
The goal of these derivatives was to create a paradigm in which large banks and hedge funds could hedge their investments and essentially insure their trading.
Many of the mathematical formulas for trading came directly from the insurance industry as people hoped to manage investment risks in the same way that they managed physical risks.
The new dergulation-regulations essentially created an environment where investors thought they could insure there lending and trades.
Please note, the mathetical formulas and regulations designed to let large investors hedge against market forces are inherently anti-market.
HEDGE FUNDS ARE ANTI-MARKET!!!
What happened in reality is that the investors created a great deal of financial fluff and hot air as they traded abstractions like credit default swaps.
As there was no real physical backing to the securities, the market went up in a puff of smoke.
The sad legacy of the 10,000 page regulation marketed to the financial communinity as "deregulation" is that pundits are able to project the failure of a set of inherenly anti-market regulations onto the free market.
The actual history of business is that risk taking leads to innovation which leads to better products and a higher quality of life.
I reject the partisan theme that risk taking is the problem. The question is the form of the risk taking.
A little known fact is that, for the last decade, the financial markets have been influenced by a little known 10,000 page piece of legislation passed in the lame duck session of the Clinton Administration called "The Securities Modernization Act of 2000."
This 10,000 page regulation is often called "deregulation." The regulation creates a slew of derivatives dreamed up in the University that were supposed to help banks and hedge funds control their risks.
The goal of these derivatives was to create a paradigm in which large banks and hedge funds could hedge their investments and essentially insure their trading.
Many of the mathematical formulas for trading came directly from the insurance industry as people hoped to manage investment risks in the same way that they managed physical risks.
The new dergulation-regulations essentially created an environment where investors thought they could insure there lending and trades.
Please note, the mathetical formulas and regulations designed to let large investors hedge against market forces are inherently anti-market.
HEDGE FUNDS ARE ANTI-MARKET!!!
What happened in reality is that the investors created a great deal of financial fluff and hot air as they traded abstractions like credit default swaps.
As there was no real physical backing to the securities, the market went up in a puff of smoke.
The sad legacy of the 10,000 page regulation marketed to the financial communinity as "deregulation" is that pundits are able to project the failure of a set of inherenly anti-market regulations onto the free market.
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