It’s All About Regulation
The Everyman’s head is spinning. He’s angry all over again and he can’t believe what’s he’s reading in the press and hearing from the talking heads about AIG, Citibank, Bank of America, Merrill Lynch, bonuses, toxic assets, earmarks and tons more. Everyman’s looking for a scapegoat. Someone needs to pay for this mess, right? One day it’s the overpriced traders and their obscene bonuses who are to blame and the next day it’s those overpriced senior executives and their obscene mansions in New York, New Jersey and Connecticut. But this blame game has to STOP. When historians look back at these times, it’s not the details that will matter the most, it’s the big picture and how we got here. And the overwhelming reason for our turmoil is one thing - lack of regulation. We became so complacent in our abilities to produce meaningful financial products that would serve all parties simultaneously, that we forgot the essential component of all good plans - the rules. We allowed Everyone, the Everyman included, to reap the benefits, but we threw caution to the wind and it all ran amok. Is it any wonder that the SEC was contacted many times over a period of many years about Bernie Madoff and his fraudulent activities, only to turn a blind eye. If the SEC wasn’t watching the chicken coop, then Everyone was asleep at the switch.
So what do we do now? First, let’s stop the finger pointing. Nobody is going to get it ALL right. Mistakes will be made and people will be human. It makes no sense to make ourselves feel good by making someone else a culprit. Instead, we need to demand of our leaders that we NEVER have this happen again. We must have prudent safeguards in place that will regulate the financial environment and prevent a meltdown. In the 1930s, Congress passed the Glass-Stiegel Act, which went a long way in helping us sort out the mess of that decade. Some say that when Glass-Stiegel was repealed in 1995, it was the beginning of our current problems and that may be true. But true or not, we need today’s form of Glass-Stiegel to pave the way to a healthier economic environment.
If the Everyman is going to vent his anger, it’s time to yell at the politicians and let them know that we need to bring rules back to the game. Only regulation will help create the proper solutions as we move forward. So forget about the anti-regulators - they’ve had their day and look where we are now!