The best possible response to the Great Recession would have been to do nothing – Business Insider

Flickr/MorganDoing nothing

Dodd-Frank was really meant to prevent bond traders from earning a million dollars. It has been successful, but as an unintended consequence, it has reduced liquidity.

Now the SEC is regulating mutual funds even more to address the liquidity problems.

• If the regulations work, they are declared a success and they write more regulations.   
• If they dont work, it means they need to have more regulations.

You find many examples of these negative feedback loops in todays markets. Ill give you another one.

Lets take Japan, for example. Japan does quantitative easing.

• If it works, it is declared a success and they do more.  
• If it doesnt work, it means they need to do more.

Japan has done…

Read the full article at: http://www.businessinsider.com/policymakers-shouldve-done-nothing-2016-3