Worldview Item of the Day
The US economy does not need any more regulation. We have plenty of laws, and at least some of those laws serve to protect us against people doing things wrong. That is, they protect us from people doing things wrong when they are applied.
It turns out that regulators at the SEC systematically ignored the fraud being perpetrated by Bernard Madoff for at least a decade, thereby failing to perform their role of enforcing the laws the US already has to prevent the very kind of scheme he was operating. In doing so, they not only cost Madoff’s investors more than he had already cost them, but they compromised the integrity of the very agency tasked with regulating activity on US stock markets.
Did you catch that? The SEC failed to regulate an investment broker engaged in a Ponzi scheme even when they had cause and opportunity to do so. This is the same agency responsible for regulating US stock markets, including the investment divisions of banks (like the ones just bailed out).
So, what is really wrong with the economy is not that there is some structural deficiency that there is not enough money or jobs or security but that our federal government costs $3 trillion a year and still allows people like Madoff to continue to break the laws already on the books. What exactly is that $3 trillion doing if it is not stopping fraud and effectively preventing people from taking advantage of others?
If we take a step back from the Madoff example and look at the problems with the entire economy right now, in almost every instance the problems began with the federal government. It was the government that created an incentive for subprime lending without effective oversight. It was the government that removed the barrier between private and investment banking without effective oversight. It is the government who is investing trillions of dollars in partial government takeovers of once private institutions without any real sense of what the ultimate effect of those investments will be.
In short, it is the government that is the problem. It is the government that consistently fails to regulate when it should (think not just Madoff but Enron and Worldcom). It is the government who continues to cost well more than it is worth (what would be the effect if, say, a trillion dollars of the budget was back in the economy). It is the government who is engaged in systematically invading our lives through the takeover of private assets that will allow them to regulate how we live our daily lives (what happens when the government owns the bank where your money is invested or the company where your car is made).
What we need, then, is a revolution. Our Founding Fathers provided us the means for this revolution in the Constitution. We can vote our worthless government out. We can call for a Constitutional convention to force the government to do what we want. We, the people, can do what we want because the government works for us.
The problem is the government–the problem is us. What are we going to do about it?