Posted by lae2 on April 17, 2009 at 13:33:49:
New regulatory efforts need to preserve innovation. Bernacke went on to say that financial products having a contrived complexity need to be regulated out of existence. This is fine and dandy but it is a smoke screen.
The most significant congressional testimony regarding the current economic slump was by Markopolis. Markopolis enlightened congress with information that greatly transcended the Madoff case. We do not have the horses to run the race aimed at enforcing current regulations; let alone new regulations. The horses are long gone and we continue to look for a locksmith. The SEC needs to be fixed. Indeed, Capitol Hill needs to be fixed.
Barnum is credited with having said that there is a sucker born every minute. If true in his time; then there must be one born every 5 seconds today. Money is insanely smart, amoral, unethical, and pleasurable. Regulations will not curb the basic qualities of money.
Predatory lenders only succeed in the presence of fish (a sucker is a type of fish). There always have been, and there always will be -- fish. The best we can do, as often said by Alan Greenspan, is to provide education and, thereby, minimize the number of fish. The fish must understand that the meaning of "there ain't no free lunch" pertains to the fish. Minimal prey reduces the number of predators.
Everyone is responsible, in some way, for the negative amplitude of the current economic downturn. Capitol Hill has made built an unfortunate campaign of inflammatory rhetoric directed at bank managers. This does not make sense unless some politicians are campaigning for reelection by appealing to voters who may not acknowledge personal responsibility for their role in the current crisis.
We are prolonging the credit crisis by continuing to bash financial management. The financial institutions that could lend money are paying off TARP funds -- in some cases; the only toxic assets on their books. Who can blame them? The certainty of share dilution is prefered to the uncertainty of Capitol Hill's cavalier micromanagement.
Think about it. What do elected public servants, whose bacon is reelection, know about competitive institutions? Unhelpful inflammatory rhetoric coming out of Washington is costing financial institutions untold monies to rebuild their image. If things were not bad enough.
Politicians need to cease thoughtless outbursts of vindictive sanctimony and begin acting in accord with their elected responsibilities -- thoughtful solutions to curb a global economic downturn.