re Gene Burns and blaming the crisis on regulation.
It pays to agree with others when you can. He is completely correct. The financial crisis isdue to the failure of regulation. The banks are granted a lgovernment monopoly power. Not regulating the banks would be like not regulating private militias like blackwater. If the government grrants a license for a monopoly, it better control it. Best , of course , not to grant the monopoly to begin with. Deregulating the financial system did let the monster out of the bag. It was wrong and it did contribute. But all that proven is that government regulation can never work. The bureaucrats can always be tricked, or bought off, or the politicians. It is best to have a market system for all things financial, regulated by the pparticipants, watching out for thier own interest, with a role for goverment that is strictly focused on punishing fraud. Private individuals should be able to bring criminal sanctions against fraudsters if they are injured. The white collar convict should be treated no differently than the common seven eleven hold up artist.
Of course, more regulation is never really the answer. Remember that
the Sarbanes-Oxley act was passed in the wake of the Enron scandal to
prevent such business shenanigans from ever happening again. How'd
that work out for us, huh?
Sarbanes-Oxley compliance has cost businesses much more money than it
has saved investors or taxpayers. And it didn't do a thing to prevent
or minimize the troubles we now face. All it's done is dry up the IPO
business, discouraging companies from going public and raising capital
through the stock market. More IPOs have been launched on the UK and
European markets over the past six years than have been ventured in
the U.S., largely due to the burden of SOX compliance, required only
of U.S. businesses.
But the U.S. government ignores SOX rules completely. Government
agencies are exempt from Sarbanes-Oxley.
A recent business analyst I heard mentioned that if the U.S.
Government were required to adhere to Sarbanes-Oxley rules, the
bailouts they recently authorized would have been completely illegal,
not to mention hundreds of sole source contracts authorized by the
Bush Administration (*cough*Haliburton*cough*Blackwater*cough*KBR*).
Terry Floyd