Regulation Has Little to Do With It
The White House, along with dominant legislators and too many commentators, profess the need for even more regulatory supervision over banks and other financial entities.
They all miss the problem. There are now almost a dozen such regulatory federal agencies around. No one has taken the tack that, perhaps, the problem has been too much regulation that overlaps. Maybe someone else is to blame.
From the SEC and Federal Reserve on down the list, what is needed is transparency, not more regulation.
The biggest culprit in the subprime debacle was Fannie Mae and Freddie Mac, which were regulated. But nothing really was done about the obvious excesses except what went on publicly and politically in Congress, under the ignorance-radar of most of the media. The latter did not think it was important enough because populist political considerations at the time saw to it that proper remedies were never available.
“Progressive” politicians rolled the dice and we lost. Regulation had little to do with it.
Friday, July 3, 2009
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