So Obama has presented the New Financial Regulatory points. The goal is to stop another AIG and halt systemic risk or economic bubble.
It is not going to work.
This is why:
The underlying problem with regulations and laws is that they are REACTIVE. They are written to stop past events from happening again. Laws are not created to stop new types of action/events in the future. How can lawmakers know the future enough to write laws to protect against them? Simple; they cannot.
The other problem is that Gov’t wants to take credit for the good and not the bad that result in Gov’t actions. They want to be responsible for a growing economy or for bringing to justice a social evil (Enron). That is what keeps them in office.
If the Gov’t wants to create regulations and laws that are geared toward another financial meltdown, they need to be prepared to take responsibility for failures and the unintended consequences of those failures. That means the Gov’t is SOLEY responsible for any future events such as the S&L Crisis, LTCM, FreddieMac / FrannieMae scandals, Dot Com Bubble, Housing Bubble and the current debt debacle.
The Gov’t won’t take responsibility for its actions, through the Fed and congress, TODAY!
Why in the world would new regulations matter if 1)the current ones are not being followed and 2)accountable parties are not brought to trial?
Senators and House reps can barely be honest with themselves let alone the public that voted them in office.
The trade off being offered by new financial regulations is “less” risk of failure for decreased freedom to SUCCEED and FAIL in the private sector.
They can keep their regs and just start handing out prison terms. Fraud = Fraud, not matter the size of campaign contributions or how long you have been on the House Finance Committee.
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