Finance

Think of “regulatory bodies” as the referees and “regulations” as the rules. What if we eliminated the “regulatory bodies” and the “rules”? What do you think would happen? Do you think that the U.S. can operate a “true” free market economy (void of regulatory bodies and regulations)? Why or Why not?

In order to guide your research, take into consideration that there are historical examples of periods or high regulation and then periods of lax regulation. Our memories are short. Usually what happens is that we will experience prosperity from relaxed regulations, and then we will have abuses such as what happened with the Financial Crisis of 2007-2008. When these abuses push the system to the brink or failure as they did during this crisis, we will experience a big push to increase regulation. The result of the 2007-2008 crisis was The Dodd Frank Financial Reform Bill (Links to an external site.). In earlier times such as the Great Depression we had bills such Glass-Steagall Banking Act of 1933 (Links to an external site.) which aimed to curb risky investments by banks. Coincidentally, Glass-Steagall was repealed in 1999 (Links to an external site.). Many believe this contributed to the severity of the 2007-2008 financial crisis. What do you think?