There is a fair chance that people would be less inclined to create the interdependencies if there were no regulation.
I don't mean that as an argument against regulation, but as an example, there are lots of stock market rules that make it simpler for individuals to make investments (required reporting of information, standards about how it is reported, etc). Without those rules, the risk would be higher and the investment would likely be lower, and the lower investment is exactly less connection to that market.
Every regulation ever has come about for a reason of observed behaviour.
So given your testable claim, I'd expect you to be able to provide before-and-after examples of regulations, wherein you show that even a significant percentage (of all regulations) make things worse.
I don't even understand what worse you are talking about. Was I don't mean that as an argument against regulation not a clear enough disclaimer that I wasn't arguing against regulation?
I don't have a magic information oracle, so I can't show you what the US economy would look like if there had never been an SEC, but I sort of expect that there would be less individuals that held stock in giant companies (because I expect there would be less overall investment and I expect that people with small amounts of money would be less inclined to expose it to an unregulated stock market).
Do you think Without those rules, the risk would be higher and the investment would likely be lower, and the lower investment is exactly less connection to that market. is nonsense, or maybe just disagree with parts or it?
I think if I don't own stocks and bonds it is quite clear that I am not as sensitive to those markets.
I don't mean that as an argument against regulation, but as an example, there are lots of stock market rules that make it simpler for individuals to make investments (required reporting of information, standards about how it is reported, etc). Without those rules, the risk would be higher and the investment would likely be lower, and the lower investment is exactly less connection to that market.