Saturday, December 28, 2013

Regulation is Futile

By that, I mean government regulation.

Bart Chilton is apparently spouting off… a little:

After almost 30 years in Washington, Bart Chilton will soon be taking his leave. For the past 6 1/2 years, he has been an outspoken member of the Commodity Futures Trading Commission, one of the financial industry’s most important regulators.

Chilton leaves behind a sobering message: As we long suspected, Wall Street continues to use every trick in its playbook to do whatever it can to eviscerate numerous post-financial-crisis rules.


Chilton adds:

“The Wall Street firms have tremendous influence, and they can impact policy to a greater degree than any one regulator or a small group of regulators can.”

To say nothing of the desire of many of those regulators to later become employed by the same firms they were previously unable to regulate.

Chilton knows why Wall Street always seems to win. Financial-industry executives contribute more money “in every election, than any other sector, and they have made more profits in every single quarter since the fall of 2008 when many of them helped crash the economy,” he explains. “So while the rest of the nation is suffering still, and trying to get a leg up to get out of the ditch, the financial sector didn’t miss a beat.”

William Cohan, the author of this short Bloomberg post, concludes:

In case you didn’t catch Chilton’s meaning, here is the shorter version: Unless and until Wall Street’s disproportionate ability to bully Washington is curtailed, the rest of us will be held hostage to its agenda.

There is only one way to end this bullying – remove Washington from the ring.

Get the Treasury Department, the SEC, the CFTC, the Fed – all of them- out of the way…totally, including no backstops for too big to fail.  Then watch how effectively these firms will be regulated.

The market can regulate just fine.

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