Baltimore — (TFN): It’s confirmation! On Friday I wrote how I may have a touch of the flu or some other mind-altering ailment because my thoughts were far more liberal than I am comfortable with admitting.

Well, it turns out my ultra-liberal, straight-ticket voting, French-guy marrying sister has a verifiable case of the pig flu. And guess who I had dinner with on Thursday night? You betcha, big sis.

There we have it: cause and effect.

Fortunately, my head case was short-lived. By the time my venison sausage and eggs were off the front burner on Saturday morning, I was back to my old self, almost knocking my O.J. off the table stomping my fist over a local political battle.

In Friday’s edition of notes, I quoted the following paragraph from Callum Robert’s book The Unnatural History of the Sea:

If any trawling ground be over-fished, the trawlers themselves will be the first persons to feel the evil effect of their own acts. Fish will become scarcer, and the produce of a day’s work will diminish until it is no longer remunerative. When this takes place (and it will take place long before the extinction of the fish) trawling in this locality will cease, and the fish will be undisturbed…

I used it to show that unregulated free markets often fail to self-police until it is too late.

More importantly, I promised to discuss how regulations are equal failures when it comes to the subject of protection from ignorant and greedy market forces.

I can list dozens of examples, but I will stick to the aquatic motif.

Recently, the federal government enacted an emergency ban on sea bass fishing here on the East Coast. From Cape Hatteras to all points north, the staple of the recreational fishing industry is off limits.

“Big whoop,” you say. “There’s other fish in the sea.”

That’s the problem. There are other fish in the sea, like tautog.

You see, NOAA tried to remedy the effect, not the cause.

The cause of the problem is there are too many greedy fishermen. But no government entity would ever want to anger somebody by telling them to put their $50k boat on blocks, so they simply close a specific fishery.

Meanwhile, the fleet, with its limitless supply of greed, moves a couple of miles and targets another species. Along the mid-Atlantic, the next species is tautog, a slow-growing habitat sensitive species.

Thanks to NOAA’s short-sightedness and must-act-now mentality, tautog are witnessing fishing pressure like never before. It is unsustainable, no matter how you measure it.

I have already given up hope on catching the species next year. Like I said on Friday, given the chance, fisherman will catch the very last of a species and then start asking, “now what?”

If you paid attention to last fall’s meltdown, you know much of the problem stemmed from the derivatives market.

The market for credit default swaps, mortgage-backed securities and a host of other credit-based derivatives went largely unregulated without notice until the weight of massive credit collapsed the shoulders of the market.

Now that hundreds of billions of dollars in wealth have disappeared, folks like Nancy Pelosi and Barney Frank want to regulate the market.

I say don’t bother wasting the ink.

The markets have already caught the last fish and will simply move onto something else. It always does.

Unless Congress bans all investing or the amounts we can stick in the market, bubbles are going to inflate and bubbles are going to pop.

The more the government tries to regulate the natural forces of the market, fear and greed, the bigger the bubbles will get and the harder they will fall.

Get used to it. It’s the way things work.

*** In Friday’s edition, I asked for comments on the notion of regulations. Wow. Ask and you shall receive!

Oddly enough, except for the guy that called me a commie (jokingly, of course), the response was quite bi-partisan. Overall, as was expected, the tone was overly anti-regulation.

By now, those of us that have paid any attention have learned regulations just won’t cut it. Now, if somebody would let Congress now.

Here’s a few of the most telling emails I received. Keep them coming.

“The problem is deeper than regulation as you know. Structurally it has been skewed and morphed into a large horse racing parlor where we place bets on the horses. Marx postulated that ‘man had become disassociated with his work’ and I believe the investors no longer invest, but  place bets on companies. They are no longer ‘investing in the company’. This was not what was intended when the word was ‘investing’.

“Another issue is the legal system we use has shifted from a ‘Constitutional’ based law to a ‘case’ based law. This helps make the system overly complex and contingent on the specific words and phrases used, and judges interpretation of this wording.

“Complexity leads to failure and we have ‘vested’ interests in keeping complex.  More regulation will not help.” –  Dave E.

“Get the wolves out of the sheep pen!

“Those who caused the meltdown should be fired or jailed, not running the institutions, agencies, and departments responsible for what we are facing for the next decade (or more). Legislators should not be permitted to legislate this problem away, they should be empowered only to assemble a committee of real experts to debate and recommend a course of action.

“Maybe in this way our representatives will be unable to do things like repeal Glass Steagall, enable Barney Frank to overextend loaning money to home buyers who can’t afford to pay rent, etc., etc.,etc.” — Bill S.

“The key to the dilemma is this.  Stop trying to find an ‘ism’ to subscribe to.  Life is a lot less crazy-making if a person isn’t trying to make sense of a situation by looking to ideologies such as liberalism or conservatism for explanation or guidance.” Kirk W.

“Unfettered free markets always devolve into feudalism. Excessive regulation always leads to collectivism. These are the two extremes in distribution of wealth. History has demonstrated that every society is on a watershed which tends to move slowly toward one or the other.” – Peter A.

More on the subject tomorrow. For now, keep the comments coming.