Michael Hiltzik: Wall Street sings the same old song
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The basic principle of parenting is that grown-ups should manage their children’s lives (up to a point)because their maturity and resistance to short-term temptations make them better judges of the kids’ welfare than the kids themselves.
As my Wednesday column observes, the same phenomenon has been displayed over the decades in the field of government regulation. The government, generally reflecting the wishes of the voters, proposes a program such as bank deposit insurance. The banks resist; the FDIC turns out to be the best medicine for restoring confidence. Government proposes to require quarterly financial reports from public companies. CEOs kick at the expense; disclosure turns out to be the key to good companies gaining access to the capital markets.
The list is endless, and business never learns.
The transcript of Thomas G. Corcoran’s ‘too many sinners’ appearance is here.
A copy of Richard Whitney’s letter to FDR complaining about the Securities Exchange Act is here.
The column starts below.
Every time I hear a big industry crab about how some new set of government regulations will mean the end to life as we know it, bring the economy crashing down around our heads, or burden the consumer with more passed-on costs, I think of the smartest words Ronald Reagan ever spoke. They were: ‘There you go again.’ Reagan and I wouldn’t have seen eye to eye on much, but this phrase sums up my exact reaction to the arguments by the financial industry and its chums in Washington against the financial regulation bill now before Congress. It’s not just that they’re opposed to any new initiatives -- that’s just industry doing what comes naturally. It’s the dismal sameness of the arguments, decade after decade, that gets to me. The bankers’ brief against regulation today is that the reforms will stifle economic recovery, hamper sound investment, create an uncontrollable government bureaucracy and overburden small businesses. They also said the government regulations were unnecessary because business was perfectly capable of regulating itself. They made exactly the same arguments in 1933 and 1934, when Congress enacted a historic round of banking, securities and stock exchange reforms.
Read the whole column.
-- Michael Hiltzik