Regulism is characterized not by the state owning firms but rather by the state making all of the key decisions for firms. The most obvious example includes firms that have been designated by regulators as “too big to fail.” After the 2008 meltdown, the Dodd Frank financial reform law allowed the Federal Reserve to designate large non-bank firms as “systemically important” and, along with banks having more than $50 billion in assets, put them under the control of a government oversight panel, the Financial Stability Oversight Council (FSOC). The law allows this FSOC to exercise “tough new supervision” to help minimize the risk these firms take, and it can even play a role in breaking up firms.
In an economy that is based primarily on capitalism, when firms close, it’s because they aren’t efficient, they don’t keep costs under control or they fail to meet the needs of customers. But in an economy characterized by regulism, with the government making the key decisions, it’s just as likely caused by government decisions as by poor business practices. No one knows.
November 07, 2015
Powerful Meme Brilliantly Compares Capitalism and Socialism
Posted by pooja