With our economic and financial crises deepening, government insiders reportedly are debating whether we need to restore some regulation—or not. Given the state of things, we can expect further woes and no regulation.
Why have regulation when JPMorgan can gobble up Bear Stearns for peanuts, with the backstage encouragement and acquiescence of the Federal Reserve Board? The Fed’s concern for the big investors is no surprise, and it needed no cue from John McCain to reject any thoughts of helping the victims of the banks’ sting operations. Meanwhile, JPMorgan has offered bonuses to Bears Stearns’ top brokers to stay on, though many of them are probably responsible for the subprime loans Bear Stearns so aggressively pursued.
George W. Bush and his cohorts have quietly dismantled more than a century of regulatory history—and good history at that. If we truly are to have “change” in Washington, the “changers” must begin by restoring those proven, efficient and protective elements of the regulatory state.
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