Government Regulations Prevent Company from Creating Jobs

Matthew:

Just give me the short version. I don't have time to listen to 7 minutes of right wing bilge.

The short version is in the caption. Regulators won't let him hire employees, and haven't for a year or two, as far as I remember.

Schiff is a libertarian republican, like Ron Paul. He's not a Hannity or Limbaugh.

Regulators won't let him hire employees for what reason?

The government mandates companies like his be a member of FINRA. One of FINRA's absurd rules requires you to have permission for the number of reps you can hire.

Here's an news story I've found on the subject, though if 7 minutes is too long, you probably won't have time to read it.

Read it and seems to me like this guy is making excuses for his own failures.

You cant blame the government for everything. He needs to take personal responsibility.

True, you can't blame the government for everything; but you can when they won't let you run a business without being a FINRA member, and FINRA won't let you create jobs and expand.

You can read about his failures here.

Here's an even better article, probably the one from which a lot of the Wiki one was drawn.

What a loser, huh, Lori?

ACtually the last one was drawn from the Wiki, it appears, but there are some shades of difference. They changed 15,000 clients to just saying several thousand in this one, for instance, because it wasn't verified in the Wiki.

Sue the site you link is Peter's own personal website and even you are smart enough to realize that you only put complimentary issues on your own site.

Even I am smart enought to know? Well, now, thank you, Matthew.

I thought it was his website at first, but then why would it be reprinted from Wiki as it says it is? Couldn't he have written his own? Sure, you only put in the positive stuff about yourself on your own website, just as you do in your own résumé, but there is factual information there about his many accomplishments. For someone to say he's making excuses for his failures without saying exactly what those failures are, it's kind of silly when you see his CV.

I just get the feeling that he's not much of a website guy because the Wiki article says that he moved his main office to Darien from Westport. If you take a look at the Euro-Capital website of even his company, the address on that website is still listed as in Westport, but if you look up the address, it is Darien, as the Wiki article says. I don't even think he cares what's on his websites. They need updating.

I don't think it's his website. He has a lot of fans who make websites about or related to him. I have never heard him refer to that url in any media format. This snippet from the front page sounds like one of his fans, not Schiff:

"Thanks to Peter Schiff for running for the United States Senate. You made a difference in sharing the message of liberty and sound economics to millions of people!"

Regardless, Lori, the ad hominem strategy doesn't rebut anything Sue said.

Oh, well, you know, I thought that was your comment that said it was his personal website. I was rather taken aback because it didn't sound like something you would have replied. I was rather angry with you the whole weekend. Thought maybe you were passive-aggressive.

Now that I see that it was just Lori, it's okay.

Yikes! I guess you mixed up Lori's comment with me. No offense taken, that can happen to anyone.

Thanks for your understanding, Matthew.

It really is kind of (sort of) interesting that his company website still lists the address from before the move that Wiki says happened in 2005. I'm sure he just has the website as a presence and not a marketing tool because his business is reliant on personal referrals and inner circles, but you'd think he would have someone update it for accuracy, anyway.

FINRA isn't a government agency.

If you looked at the sources I've provided, you would realize that's irrelevant.

I did: you said it was the government that was preventing him from hiring people. It's not.

You can't have it both ways, Matthew.

I see nothing about mandatory association. Again I think this guy is making up excuses maybe because his business isnt doing so well and he has to blame someone.

Government is. In case you weren't aware, the government mandates his company be a FINRA member.

FINRA has been around since 1939. The problem isnt with the organization but with one guy.

I'm challenging the merit of these arbitrary government regulations in the first place. The fact that they have been around for (up to) 72 years and this is the first story like this you have heard doesn't prove anything I've posted incorrect.

He is making excuses. No one is preventing him from hiring.

What evidence do you have for this assertion?

It doesnt seem funny to you that every other brokerage firm can operate under the guidlines and do just fine and in many cases become very successful and this one guy is having issues so instead of taking responsibility for his own business and the fact that maybe he isnt the greatest business man in the world he looks for a scampgoat.

So by your standards if a lawyer cant pass the bar exam than the system is flawed and should be gotten rid of instead of one person who apparently isnt intelligent enough.

that should be scapegoat.

Every other firm is not doing fine. From the news story:

small brokerage firms like Schiff's are complaining that the Financial Industry Regulatory Authority (Finra) has been hobbling their businesses with over-regulation.

I don't know why you and Ali are automatically inclined to disbelieve the information provided by Schiff and others. Must be the typical anti-business "progressive" streak in you. If government made some similar claims I doubt you would question it at all.

Schiff has commented:

The fact is that it’s not FINRA that is destroying the brokerage industry, its congress. FINRA is simply enforcing the laws congress writes. The SEC watches over FINRA to make sure it carries out that mission. In this post-Madoff environment no regulator wants to appear lax in its enforcement. So the big firms get bigger, the small firms disappear, and investors are the losers as a less competitive, more heavily regulated industry drives costs up and quality down.

Sound like a non-governemnt situation? lol.

Information about broker-dealer regulations are not easily accessible by the public. I'm going to do some more research at some point, but I have no reason to disbelieve the information I've posted here.

The fact remains you have no proof he is incorrect, but assume he is for some (presumably) biased anti-business reason.

BTW, his business is doing just fine. He has been trying to expand for 2 years, for crying out loud! Doesn't sound like a failing business at all.

Thanks, Matthew. Good luck in convincing some that government is bad and business is good.

We've already seen the massive catastrophe that the last ten years of unenforced rules, lax oversight and allegedly "pro-business" polices have wreaked on the country.

If this guy can't figure out how to get it done, instead of having shills promote his agenda like it was the absolute truth, maybe he should buy some expertise.

Ali, don't you get it? By not allowing small businesses to grow, or forcing them out of business entirely, but making it easy for big ones to do so, you're getting the very environment that you hate - lots of big businesses.

Both Schiff and I advocate genuine free markets, not corporatism, that is, the policies of the last 10+ years.

I'm really appalled at the reaction from you and Lori, and hope it is not reflective of the average Progressive/Democrat.

It's not "this guy's" fault, but the existence of the absurd, arbitrary regulations which benefit no one except big business and politicians.

I am appauled that people like you and Marilyn want to blame the government for everything and cant seem to accept that a person has to take responsiblity for their own shortcomings.

Problem is, Lori, that's not the situation, as I've described in comments above. Hence, I think your "appallment" is unfounded.

Republicans have consistently voted against small business.

True, though I don't necessarily think that bill would help small businesses.

Matthew, more and more I think that as a requirement to graduate from high school and college, each person should be able to prove that he/she has run a small business experience, even if it was just running a lemonade stand.

It makes no sense at all that people demonize businesses for wanting to grow, then complain when they don't hire people.

I agree, they want it both ways, business suck but they don't they create jobs? Sigh. Sadly, government can't even keep it's hand out of a lemonade stand.

I can see why people left their homeland and came to America hundreds of years ago. It's nearly impossible to change the statist quo, and much easier to establish a new place. Unfortunately, we're out of unclaimed land.

There are many such restraints put on people and businesses by government. In Oregon, if you want to start a moving company, you have to prove that there is a need for your service. It goes before a group and they can deny the permit if they choose. And guess who makes up the group with veto power? It is other moving companies who don't want any more competition. How stupid is that?

It is similar to the "taxi medallions" that a person has to have in NYC to start a taxi company. They are limited and cost over $500,000 to get one. It is just another way the government restricts business creation. All a person should have to have to use their car as a taxi should be: A safe car, an appropriate driver's license, a good driving record, a background check, insurance and a small filing fee ($100 or less per year) That would lower prices on cab service and the existing cabs don't want that to happen. That isn't a free market, it is central planning and it stinks.

Good examples, Dan. It's outrageous. These regulations greatly benefit established, well connected, often large businesses and the politicians, but come at a great cost for the rest of us, both economically, and most importantly, in regards to our freedom.

Those ridiculously frivolous lawsuits he notes at the end do make it prohibitive for small firms too. Imagine being able to think you can take someone to court and sue them because you claim you were introduced to the person who supposedly lost your money by a broker who works for that person you're suing. And like he said, nothing will come of it, but the time and money he's wasted on this stupid suit is a loss he really can't recuperate.

And I've said this before in general about the justice system. All this suing and counter-suing only makes attorneys rich. The whole justice system needs to be revamped. You want to sue someone, you want to incriminate someone for harm you allege has been done to you, and it's proven that they are not guilty, then you pay damages to them right then and there, including court costs and attorney fees. Want to watch how fast some of this BS stops in its tracks?

You want to sue someone, you want to incriminate someone for harm you allege has been done to you, and it's proven that they are not guilty, then you pay damages to them right then and there, including court costs and attorney fees. Want to watch how fast some of this BS stops in its tracks?

Yeah, that would stop it, real fast. I wonder what it would take to get common sense like that implemented.

Will never happen, but I hate to say never so I'll just say that it's not going to happen in our lifetimes. It would all but kill the greater percentage of the ltigation business. Attorneys would be on bread lines.

Attorneys are just another special interest group (SIG) trying to live off everyone else. It probably won't come to an end as long as people believe it is the state's job to pander to SIG's.

How do we keep businesses from going to excess and, in so doing, destroy the economy? How do we prevent greed from encouraging individuals and businesses into doing unethical and dangerous things in markets? Because they know that eventually it will cost? No. That hasn't worked. The threat or risk has not proven to be enough of a control on behavior (even with regulation). Matthew, I understand your perspective, but even the best free market economists were mystified about how the market could have allowed the CDS market to grow into the tens of trillions of dollars range when we had had housing bubbles in the past. The business world knows about risk, but for many illogical and human reasons, business leaders like to play the edge of that risk, threatening all of our wealth.

Regulation, even when it gets in the way of business growth, is essential to controlling the dangers inherent in a free market. While it is true that a free market is the best way to govern business activity, we should not delude ourselves into believing that there are no dangers there. Business doesn't automatically control itself. Regardless of how much we would like to believe that all business leaders are noble and want sustainable wealth, they don't and they aren't. Some are great and noble people. But their goals are not identical to the nation's as much as we would prefer for them to be.

We need regulation. Even when it hurts.

I disagree. The market will work with minimum government regulation if it is given the chance. You mention the housing problem and that was due primarily by government regulations that allowed the greed to collapse the housing industry.
Government does have a regulatory role but it should be limited to making sure a company doesn't do things that will physically harm or infringe on the rights of other companies or consumers. Most of the corruption comes from alliances between politicians and groups of individuals that are given advantages their competitors don't get.

Before there was government intervention in housing, there were housing bubbles. Your argument that most of the corruption comes from politicians and said 'groups of individuals' is true, because we've done a better job eliminating opportunities for businesses to monopolize and conduct unfair business.

We've tried more 'Laissez Faire' systems in the past and they've usually resulted in much more endemic corruption than the system we have now. The 'muckrakers' are a perfect example of where private citizens had to go to extraordinary lengths against companies who made death threats and had massive government complicity (which they bought so as to avoid competition).

The Republic of Korea is a great example of a 'less-regulated-than-ours' economy. If there are fifteen fried chicken joints on a given street, no one will raise an eyebrow at you opening a sixteenth. This doesn't help small business. It hurts it. By not forcing those small business entrepreneurs to find new markets, all of those chicken joints end up going out of business inside six months. But they just keep coming back under new names. And every family that tries it ends up poorer than when they started. A stark contrast to the US where there isn't a MacDonald's franchise owner who didn't become a millionaire.

Oh, and the CDS market exchange was not a result of changes in Federal regulation, but rather the establishment of novel market practices by Goldmann-Sacks that they themselves later disavowed. The fact that they were backed by bad mortgages just made it all the more fragile. Banks sold and resold those CDS's so often and at such a mark-up that there were tens of trillions in unearned profits being passed around. The fact that this market was new and severely under-regulated only made it more guaranteed to fail.

Yes, you are right that over-regulation can be a bad thing. But we need to avoid throwing the baby out with the bathwater. Regulation helps more than it hurts, when used the right way and for the right reasons.

You state your point well, however, I'm not arguing against the need for regulation per se, but rather between 1. sensible regulation vs. absurdity, and most importantly 2. who regulates.

This video highlights what seems to be an indefensible government from both utilitarian and moral perspectives.

I must take it a step further, though, and question whether or not government arbitrary regulation is justifiable, whether or not there are better alternatives (like market regulation).

I understand your perspective, but even the best free market economists were mystified about how the market could have allowed the CDS market to grow into the tens of trillions of dollars range when we had had housing bubbles in the past. The business world knows about risk, but for many illogical and human reasons, business leaders like to play the edge of that risk, threatening all of our wealth.

I'm curious if you are thinking of the Chicago/monetarist schools, in your reference to "free market economists"?

I would suggest that the CDS problem was only possible because of government, particularly the Federal reserve and it's money creating abilities. the Austrian school of economics, the only school that supports pure free markets, weren't surprised at the big mess that unfolded in the past 10 years. Peter Schiff, the main subject of this video, in fact, is famous for predicting the housing bubble and it's associated problems. Either of the videos I linked to in the first paragraph of the caption demonstrate this nicely.

We need regulation. Even when it hurts.

Including the one highlighted here?

Peter Schiff and the Austrian school in general is long acquainted with housing bubbles and, to be honest, I've never understood why the 'orthodox' school doesn't recognize their significance in driving our bust cycles. The specific issue with CDS, however, seemed to catch everyone by surprise; but perhaps that's just my interpretation. It's true that the housing bubble definitely had government collusion (or perhaps direction, depending on perspective). But the CDS was a banking industry creation and the lack of regulation or government intervention in it was of the industry's preference (or design).

The shadow-banking world of CDS is certainly akin to monetary speculation, but the specific instruments were not regulated by the Fed nor were the 'banks' who exchanged them. It seems to me that they (the banks) came up with a new little scrap of paper they could buy and sell only to each other like it was a big secret that was going to make them all filthy rich. And they passed it around like a venereal disease until everyone was so invested that they couldn't walk away or back out. So not only did we have a housing bubble, of the type we've known about for a long time, but also a banking collapse of a type we've never known. Essentially, the CDS created a speculation market like the stock market but without the controls. Banks bought CDS on margin and passed them back and forth with mark-ups covering margins and loans covering mark-ups until the 'imaginary money' of the added value of these CDS was so far out of balance with their actual worth, that it was bound to collapse.

And, no. Not specifically this entity which, it appears, is more like a trade union than government entity. I don't disagree that this is extreme and painful. I'm just cautioning about baby-with-the-bathwater syndrome. It's easy, when faced with examples like this, to denounce regulation; particularly when good regulation is so transparent to the consumer that they never notice it. And that's really the key. Good regulation makes it seem like it's just 'the way things get done'. It ensures fairness in the business world and protects the consumer. Bad regulation is what causes most of the heartburn (and good regulation when people want to do things that they shouldn't).

Arbitrary regulation is only helpful if, in its arbitrariness, it creates a 'way of doing business' that is beneficial to the free market, either in protecting from unnecessary risk, or by mitigating the opportunity for unfair practice. When it comes right down to it, all regulation must be arbitrary. It must come from a shared sense of fairness and some kind of plan for the future of the community, but those ethics and visions are not universal. They are uniquely American. But they must also be a compromise between too much and too little regulation. Between government dictating winners and losers, and government intelligently investing in valued future infrastructure.

This is funny. One of the core libertarian principals is that the free-market can regulate itself. FINRA is a private corporation funded by the brokerage industry. So you got want you wanted, free-market regulating itself and you guys still complain. This post is factually incorrect.

And Fannie and Freddie are considered private corporations but they are actually quasi government organizations largely controlled by politicians. The regulatory power Congress has over similar organizations makes it hard to call them truly "private corporations".

Fannie and Freddie have nothing to do with this article at all. Maybe if people would stop all the attempts to justify and excuse they would see the light.

isaiah you are exactly correct.

Wrong Dan. Fannie and Freddie were never known as private corporations. They were always known as government-sponsored enterprises, meaning they were created by Congress and taxpayer funded. FINRA is independent from the government and again industry funded. They are what is known as a self-regulatory organization. Which is what I thought libertarians wanted.

BTW, what's up Lori.

Yes, it is funny, because you are forgetting something. Schiff's firm must be a FINRA member, because the government says so. Apparently, that's not the extent of government's FINRA/broker-dealer interventionism, but it's sufficient to prove there is absolutely no free market.

Yes, it is funny, because you are forgetting something. Schiff's firm must be a FINRA member, because the government says so.

If you go to FINRA's website they have a list of members, and EURO PACIFIC CAPITAL, INC. (Schiff's firm) is on that list. Did you do any research?

but it's sufficient to prove there is absolutely no free market

So let me get this straight, your evidence that there is no free market is the free market regulating itself. That makes no logically sense.

Ok, I see what you mean by must. You're asking why he has to be part of FINRA.

Well yeah. What do you want, Schiff to precipitant in the brokerage industry without any oversight whatsoever, not even from the industry itself?

government's FINRA

How many times do we have to tell you this? FINRA is not the government. It's self-regulatory organization. I know how much you hate the government, but your beef is not with them in this particular situation. Your beef is with the brokerage industry.

As long as government forces membership, it's not market regulation, which is superior on both moral and utilitarian grounds.

How many times do we have to tell you this? FINRA is not the government.

You've taken that out of context.

And my beef is with the government. Eliminate it's involvement in the situation and EuroPac or other firms are free to leave FINRA and go about regulation another way if they wish.

Eliminate it's involvement in the situation and EuroPac or other firms are free to leave FINRA and go about regulation another way if they wish.

Go about regulation what other way? FINRA is the only organization that regulates the brokerage industry. I'll say this again, I think you want these guys to be able to operate with no oversight whatsoever. And saying that the government making brokerage firms follow some type of rules by their own industry means there's no free market is just reaching.

FINRA is the only organization now because government has granted them a monopoly (by requiring membership...).

I want market regulation, involves competing ratings/accreditation agencies and customer regulation. The only rule government enforces is "don't violate other's rights".

Now would probably be a good time to refer to this article, What is a Free Market?. It's not a stretch at all to say the government regulations we are discussing have absolutely no place in a real free market.

FINRA is the only organization now because government has granted them a monopoly (by requiring membership...).

FINRA doesn't have monopoly. North American Securities Administrators Association is another organization that regulates securities. BTW, you're complaining about 2 companies in the market making a decision to merge (NASD & New York Stock Exchange). This is how FINRA was formed.

I want market regulation, involves competing ratings/accreditation agencies and customer regulation. The only rule government enforces is "don't violate other's rights".

You obviously don't want market regulation because FINRA is exactly that.

Now would probably be a good time to refer to this article, What is a Free Market?. It's not a stretch at all to say the government regulations we are discussing have absolutely no place in a real free market.

I've read alot of your articles, and you don't have a clue what you're talking about, then again Libertarians never do. You wrote an article complaining about market regulation while claiming to support market regulation.

Your pro-government, anti-libertarian, anti-business bias is getting in the way again, Isaiah. I think you know my only problem is with government coercion here. Government forces EuroPac to be a FINRA member. That's the problem. As long as this is true, FINRA is no longer a purely market based regulator. It has government power behind it.

Again, that's not even the extent of government's involvement, according to Schiff, but it's enough for anyone to figure out that it's not what I advocate, pure market regulation.

Your pro-government

You just have an irrational hatred for the federal government. Us liberals are the main people against our government. We're against the government for things that actually matter (illegal wars, civil liberties abuses, favoring the powerful special interest, etc.) We realize that government has a role in the lives of the citizens because government is suppose to be a representation of it's citizens (too bad it hasn't been lately).

anti-libertarian

You damn right I'm anti-libertarian/conservative. Your policies are counter-productive, and moronic. And guess what, the vast majority agrees with me. This country is liberal. In issue after issue polling showing the country is on our side.

anti-business bias

I know you want corporations to rule over us, but the rest of us think corporations should follow rules that are in the interest of the general public if they want to operate in this country.

Government forces EuroPac to be a FINRA member. That's the problem.

EuroPac just like every company is going to have to answer to somebody if they wanted to operate in the marketplace. They can't do whatever they want. I know you don't want there to be any rules, but that's just not going to happen.

This article is utter bullshit and you libertarians are getting old. You write an article about a guy who is clearly full of it, who is complaining about his own industry regulating him. Then he lies and said it's the government's fault. It's obvious he wants no rules. That's the idiotic stance all libertarians have. BTW, there is no such thing as a free market and there never was. It's a fantasy world that you guy created, it's like how Christians created heaven. Since the beginning of this country, the private market had to follow basic rules that are in the public interest.

I won't bother correcting ad hominem attacks and your distortions and misunderstandings of libertarianism, Schiff, market regulation vs. FINRA, etc again. You'll be faithful to your ideology regardless. I think I've been fair to you and your opinions, however- if you cannot return the favor- I have no more time to waste on this.

You'll be faithful to your ideology regardless.

This is one of the most ironic statements I've ever read. We liberals based our beliefs on facts, evidence, history, results, etc. Libertarianism is based on faith. Come to think of it, Libertarianism and free-market is nothing but a religion.

I knew you'd say that, revealing again your ignorance of libertarianism and Austrian economics. It's been said:

"It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance."

I know plenty about economics. I'm definitely not stupid enough to believe in Austrian economics. "Hey everybody, let corporations do whatever they want without any accountable, and everything will be fine. The free market will fix itself." That genius, even though we have plenty evidence proving you wrong(such as history). You don't have a shred of evidence to prove any of your beliefs to be true.

Again you embarrass yourself, with nonsense like this: "Hey everybody, let corporations do whatever they want without any accountable, and everything will be fine."

And then you point to a corporatist/interventionist economy to prove the free market is a failure. Epic fail.

The free market is a complete corporate agenda. You guys push for deregulation, which means big business have less rules to follow so they have less accountability. We tried your free market and we got things like the BP oil spill, the Exxon-Mobile oil spill, and the financial collapse. Free market IS a failure, it's been shown time and time again. But you go ahead and keep believing in your religion. You could show me evidence that your economic beliefs are true, but I doubt you will.

There's a reason I linked to an article (above) defining free market. It obviously means something different to you than to me. Communication fails when people are not speaking the same language.

Free market has one meaning. A market with limited or no state intervention. Laissez-faire capitalism. We've tried your way since Reagan, and it's a miserable failure. I've already listed your market's "greatest hits".

Your definition is mostly correct as far as it goes, but is incomplete.

We've tried your way since Reagan, and it's a miserable failure.

This is either you being disingenuous or ignorant. Nothing could be further from the truth.

Your definition is mostly correct as far as it goes, but is incomplete.

No, my definition is spot on.

This is either you being disingenuous or ignorant. Nothing could be further from the truth.

Really, then why don't you tell me about the great success of your magical heaven called the free market.

There is more to a free market than "a market with limited or no state intervention". Intervention (violating rights) must not come from anyone- the state or individuals.

Where you are wrong is in saying "We've tried your way since Reagan". It's precisely the statist policies of the past 30+ years that have been a miserable failure.

Obama could learn a thing or to from my FL state governor. For the last 5 months in a row we have had a decline in unemployment. Why you ask? It's simple, he is bringing jobs to FL that Obama has forced out of the country. So hooray for him. Obama says its declining but the reports say otherwise, it has been on a steady rise across the country. Obamanus doesn't know how to do anything except lie, cheat and raise taxes. He also likes to subvert the Constitution every time he gets a chance. He is the reason this country is a mess. Facts are facts people. Some of you all really need to wake up and smell the bs spewing from his mouth. We have never had a potus that has taken so many vacations on tax payers dollars as he has. No other potus has stripped the National day of prayer, which is for all religions, and replaced it with the national day of Islam. He is anti-american and he is a Muslim. He proves it every day. WAKE UP!!!!

Okay. Now, if this were only ever said about one President, I would shrug and say "maybe she's right, maybe he's a bad guy". But since the same vitriol is aimed at every Democrat (except the libertarians that everyone accept as being "way out there"), I'm inclined to disbelieve just on that fact alone. The whole Republicans are sane and want only what's best for America while the Democrats are evil is old.

Thanks for the recommendation. There are a lot of serious problems with Obama (and his predecessors), but I'm not sure how the Obama bashing (deserved or not) relates to the video.

Likely, Presidents are unaware of these particular regulations, which is okay (there are too many for one mind to grasp). What's not okay is their failure to support free markets or at least move in that direction in a meaningful way. Obama, unfortunately, has been running in the opposite direction.