Informed and sophisticated critique, I think. http://cdn.harvardlawreview.org/wp-cont ... evitin.pdf

freeman3 wrote:Informed and sophisticated critique, I think. http://cdn.harvardlawreview.org/wp-cont ... evitin.pdf

looong...

I am working through it. So far, my highlight:

Ben Bernanke wrote: Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton [Friedman] and Anna [Schwarz]: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.

In 2002.

The conclusion is succinct. The only way for a more permanent solution on the proper regulatory environment is to somehow change the way politics influences regulation.
I wonder if that is possible?

Without getting full circle back to the thread I started on democracy, I do not think we can actually fundamentally alter the nature of politics. In theory (and sometimes in practice) the politicians in a democracy end up giving the People what they want and that does not necessarily equate with what they need. And then (yes, yes, yes...) there are other factors.

Although I think that in the [somewhat distant] past Congress had actually done a decent job of passing regulation, although not with a degree of prophecy necessary to stave off actual disaster. It was not until the debacle known as the Great Depression (and the 1929 to 1933 Bear Market...more like massive angry polar bear market...) that Congress got its shit wired and passed the Securities Act of 1932 and the Securities Exchange Act of 1933, creating the SEC. The Investment Company Act of 1940, however, was indeed pretty prophetic. There were less than 50 mutual funds (I don't recall the exact number) in the whole United States' securities markets at the time. There are now 10,000, all governed by the 1940 Act. So one out of three ain't bad, I guess...

OK what's my point? Members of Congress have, in the past, thought rather ahead (though not in time to prevent the massive financial @#$! that was the Great Depression and its associated bear market and bank failures). But when they haven't, well, that is rather human nature, isn't it? Human beings tend not to fix things, no matter how many Cassandras are shouting at them to do something, until they are standing on the edge of a precipice, ready to fall into the chasm.