Thursday, October 16, 2008


Conservatives keep saying that deregulation is good for business. They did unsuccessfully try to enact legislation to regulate Fannie Mae and Freddie Mac but were unsuccessful and now we have the sub-prime mess. Other businesses have been deregulated from telecommunications to airlines.

Deregulation seems like a good idea and one that would unfetter businesses to become more competitive. However, some of the regulations seek to protect consumers. The legislation enacted by President Carter to deregulate airlines proved a disaster.

Watching last nights debate, to me, Senator McCain's health care proposal looks almost to be a call for deregulation. As Senator Obama pointed out, employers would have the ability to go with insurance companies located in other states where those companies offer fewer benefits. Also, McCain's proposed $5,000 credit for individuals to buy their own insurance is great as long as you don't want coverage for your family. Sure, an individual's insurance premium will be under $5,000. But if you want to cover your spouse and/or children, the credit falls $3,000 to $7,000 short.

We've seen how great deregulation has worked the airline industry and for Fannie Mae and Freddie Mac. Since, the telecommunications industry was deregulated, phone bills, cable, etc has gone up. In short, deregulation in the telecommunications industry hasn't really spurred all that much competitiveness.

The deregulation of Fannie Mae and Freddie Mac looks to be leading this country into a deep recession. And that deregulation really didn't help the people intended. House prices were unrealistically inflated. Also, the sub-prime mess allowed middle income people to speculate in the housing market and buy property with interest only loans. The majority of those with interest only loans sought to sell the property purchased at a higher price. This too, over-inflated housing costs.

McCain's plan sounds very good for the employer but doesn't do very much for average Joes who can barely afford health insurance premiums now. And it isn't going to result in more people being to afford health insurance.

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