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Man Bites Dog! Regulatory Edition

posted by Adam Levitin

I woke up this morning to see an abstract of a paper entitled Is Regulation to Blame for the Decline in American Entrepreneurship? When I saw that one of the co-authors was on the George Mason University economics faculty, I said to myself, "Well I know how this plays out." But then I read the abstract, which concludes: Federal regulation has had little to no effect on declining dynamism."

I wonder what the same commentators who trumpeted the "Dodd-Frank is killing community banks" stuff will think of this paper. I'm personally skeptical that one can measure the stringency of regulation in any quantifiable way, much less for different industries, but I'll just flag that this paper is out there.


IMHO - the decline in entrepreneurship stems from the vast number of baby-boomers who were in or nearing retirement when the financial crisis took out there real estate investments... that also stemmed from fraudulent appraisals instituted by the banks in order to suck out all of the equity under [known and intentionally] false and delusional promises of a 70-year boom of the real estate market that would continue to grow.

Many were in construction related professions and had re-invested in real estate that would afford them a worthy retirement and help fund the entrepreneurship desires of their children (and others). Not to mention the businesses these elder entrepreneurs build that may have been sold or taken over by their children were on the ground floors when the banks flattened and destroyed the wheels of the economy. Their losses can never be regained.

From George Mason? Who'd have expected that? Although it does explain the first footnote.

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