The market is clearly not working and it is not due to regulation but a lack of it. What regulation caused the credit crunch?

The credit crunch began in subprime mortgages, which—along with virtually all mortgage loans in this country—is a highly regulated banking/finance sector. Regulations that urged financial institutions to extend loans to very risky prospective homeowners (under the cloak of expanding the American dream of homeownership as part of Bush’s “ownership society”), allowed institutions to bundle and repackage those mortgages as “asset-backed collateral” and resell them for more profit, and then allowed them to hide those rotting loans off their books so that the losses didn’t count and weren’t “marked to market” are certainly at least partially responsible, wouldn’t you agree?

The fact is that markets are already skewed.

Yes, they are—that is my primary point. The only way to completely unskew them is to remove the state’s regulations.

Do pensioners know what each of the companies that their money is invested in is doing? Did each of the mortgagees know that their loan came from dodgy instruments?

Probably not; and that is a failure of those individuals to do their due diligence. Government protection rackets, such as the FDIC, provide a false sense of security and help enable complacency.

Even now the reason that that LIBOR is so high is that banks are unable to assess the information about each the health of each other. More regulation would be better. Not stupid regulation - regulation that ensures transparency.

Thanks for the laugh. How can anyone enforce total transparency, without complete fascism?

I would support a definition of "working" which included encouraging capital to be used not for just nything, but for things that are healthy for the planet, the people, and the markets themselves. There needs to be some responsibility to the world at large in the use of capital not just to its owner.

So you’re a socialist, then, it appears. We aren’t likely to agree on much.