Recent Items

Bill Black: “The only winning move is not to play”—the insanity of the regulatory race to the bottom

Posted on by

Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives.

The plot of the movie WarGames (1983) involves a slacker hacker (played by Matthew Broderick) who starts playing the game “Global Thermonuclear War” with Joshua, a Department of Defense (DoD) supercomputer that has been given partial control by DoD of our nuclear forces.  The game prompts Joshua, who has been programmed to win games, to trick DoD into authorizing Joshua to launch an attack on the Soviet Union so that Joshua can win the game.  The hacker and the professor that programmed Joshua realize that the only way to prevent Joshua from attacking is to teach “him” that no one can “win” global thermonuclear war.  The insanity is that the people who created the game “Global Thermonuclear War” thought it could be won.  Joshua races through thousands of scenarios and ends his plan to win the “Global Thermonuclear War” game by attacking the Soviet Union when he realizes that “the only winning move is not to play.”

The JOBS Act is insane on many levels.  It creates an extraordinarily criminogenic environment in which securities fraud will become even more out of control.   One of the forms of insanity is the belief that one can “win” a regulatory “race to the bottom.”  The only winning move is not to play in a regulatory race to the bottom.  The primary rationale for the JOBS Act is the claim that we must win a regulatory race to the bottom with the City of London by adopting even weaker protections for investors from securities fraud than does the United Kingdom (UK).

The second form of insanity is that the JOBS Act is being adopted without any consideration of the findings of the Financial Crisis Inquiry Commission (FCIC), the national commission to investigate the causes of the current crisis.  I am not aware of any proponent or opponent of the JOBS Act (other than me) who has cited the findings of FCIC.  Everyone involved has ignored the detailed finding of a huge investigative effort.  The FCIC report explained repeatedly how the three “de’s” (deregulation, desupervision, and de facto decriminalization) had produced the criminogenic environment that drove the financial crisis.  The FCIC report specifically condemned the “regulatory arbitrage” that the worst actors exploited by choosing to be (not very) regulated by the “winners” of the regulatory race to the bottom.  The FCIC report shows repeatedly how damaging the anti-regulatory fervor in general and the race to the bottom in particular proved.

The third form of insanity is that the JOBS Act was framed without any input from anti-fraud experts.  Anti-fraud experts uniformly condemned the bill.  We have ignored the experts.

The fourth form of insanity is that we have ignored the people who got past crises correct.  The people who were the first to identify prior crises, who designed and implemented successful means to limit the crises, who prevented problems through effective supervision from becoming crises, and who held the most elite fraudulent CEOs culpable for their frauds have all been excluded from the drafting of the JOBS Act.

The fifth form of insanity is that the people who got everything wrong by designing the anti-regulatory policies that drove our prior crises have designed the JOBS Act.  We are reinforcing failure and turning our back on what we know succeeds.

The sixth form of insanity is a counterfactual.  The unique aspect about this crisis is that it is the first one in modern U.S. history in which the CEOs directing the control frauds that caused the crisis have done so with complete impunity from the criminal laws and near impunity from civil suits and enforcement actions.  The worst, most destructive fraudulent CEOs have been allowed to become and remain wealthy through their frauds even though several of them caused greater losses than the entire S&L debacle.  The worst fraudulent CEOs who led the prior epidemics of accounting control fraud that drove the S&L debacle and the Enron-era crisis were prosecuted.  Not a single elite CEO from Wall Street or the largest fraudulent lenders has even been charged with fraud arising from such loans even though they, collectively, made over two million fraudulent loans in 2006.  Had the Bush and Obama administrations prosecuted and denounced these elite frauds it would have been politically impossible for an act as criminogenic and cynical as the JOBS Act to be promoted by the Obama administration and adopted by large Congressional minorities.  We are seeing with the JOBS Act the sick face of crony capitalism.

The seventh form of insanity is that there is no greater killer of jobs than elite financial fraud.  Such fraud epidemics can hyper-inflate bubbles (as they did in the U.S. and several European nations) and cause severe financial crises and recessions.  The resulting Great Recession has cost over 10 million Americans their existing or future jobs in this crisis.  It has cost over another 15 million people their existing or future jobs in Europe.  The JOBS Act is so fraud friendly that it will harm capital formation and produce additional job losses.  It may appear to be an oxymoron designed by regular morons, but that underestimates the abilities of the lobbyists that drafted this bill.  They are not morons.  They are doing faithful, clever service to their fraudulent clients.  That makes them more dangerous.

The eighth form of insanity is that all of this is occurring weeks after the death of James Q. Wilson, a prominent political scientist who became most famous for co-developing a criminological theory – “broken windows.”  The theory held that it was essential to elevate conduct in the public sphere by reorienting enforcement priorities to emphasize seemingly minor crimes and civil wrongs (e.g., cracking down on squeegee men).  Wilson and “broken windows” are near universal favorites of conservatives.  Wilson’s theories are controversial among criminologists in the blue collar sphere, but they are broadly accepted in the white-collar sphere.  The JOBS Act, however, totally repudiates any “broken windows” approach to minimizing elite white-collar crimes.  It encourages the kind of fraud-friendly conduct that has always proven severely criminogenic.  Conservatives are the strongest supporters of the JOBS Act, which allegorically hands out buckets of rocks to the bottom feeders of the world of securities and encourages them to break every window in sight.  Conservatives apply policies designed to prevent and repair immediately “broken windows” only to poor criminals, not the fraudulent CEOs who caused vastly greater financial losses that brought the global economy to its knees.

The ninth form of insanity is that the JOBS Act is being adopted at the same time that the Federal Reserve Bank of Dallas – the most anti-regulatory bank in the entire Federal Reserve system (which is a very large statement) warned in its recently released annual report that the largest U.S. banks drove the ongoing crisis and posed “a clear and present danger to the U.S. economy.”

The Dallas Fed used to object vociferously to all financial regulation because it claimed that markets were “self-correcting” absent regulation.  It now warns that market “incentives often turn perverse, and self-interest can turn malevolent. That’s what happened in the years before the financial crisis.”  Only effective regulatory “cops on the beat” can prevent frauds from creating a perverse “Gresham’s dynamic” (when frauds prosper, market forces become perverse and bad ethics drives good ethics out of the marketplace).  Effective securities regulation has led to U.S. equities trading at a significant premium compared to other nations, which aids U.S. equity issuers.  The JOBS Act threatens the continuation of that premium.  Even the Dallas Fed’s most senior economist and President – and the Dallas Fed has been the leading opponent of financial regulation – now agrees that effective regulation is essential to strong financial markets.  The Obama administration and Congress still worship at the temple of the faith-based economics that has caused our recurrent, intensifying financial crises.  When the temple’s high priests (the Dallas Fed’s leadership) become apostate the politicians should shed their dogma.                          

The tenth form of insanity is that the JOBS Act’s primary theme is dramatically reducing transparency in securities law.  If there is any nearly universal principle that writers about the ongoing global crisis emphasized that we needed to learn it was the exceptional virtue of transparency.  Greater transparency makes private market discipline possible, it greatly enhances regulatory effectiveness, it discourages fraud, and it aids investors in making decisions.  The JOBS Act repeatedly embraces opaqueness.  We have known for millennia that this increases fraud.

For every one that doeth evil hateth the light, neither cometh to the light, lest his deeds should be reproved.

John 3:20 – 1769 Oxford King James Bible ‘Authorized Version

Print Friendly
Twitter29DiggReddit1StumbleUpon1Facebook54LinkedIn1Google+3bufferEmail

60 comments

  1. hotairmail

    “The insanity is that the people who created the game “Global Thermonuclear War” thought it could be won.”

    They didn’t. The strategem was known as ‘Mutually Assured Destruction” (MAD for short). It was game theory designed to stop nuclear war. It has worked so far.

  2. ambrit

    Mr. Black;
    We’re with you so far. The next step though is the hard one; changing the rules of the political game sufficiently to block the corrupting influence of big money in politics. Will it take a major worldwide financial crisis to force us to reform? I fear for us all. In the 1930s we were lucky enough to have a civic minded son of wealth, FDR, to champion the reform of their colapsing system. Who fills that bill now? That’s what worries me. I can’t find a prominent politician today who’s not in thrall to wealth, both abstract and concrete.

    1. mac

      I think that luck as well as FDR helped us thru the 1930′s. A lot of the moves made to solve the problems only made them worse, things got better as we put our people and wealth into WWII.
      The main players on the stage today as well as many of the population don’t have the qualities that brought us thru the 1930′s.
      I wsa born in the middle of the 1930′s and recall a bit of the end and much of the 1940′s. Things are just different today.

      1. gordon

        I know that “WWII ended the Depression” is almost universally believed, but the fact seems to be that New Deal policies were working in the US, unemployment was falling and GDP was rising (except for the 1937 hiccup) before the US entered the war. See here:

        http://krugman.blogs.nytimes.com/2008/11/08/new-deal-economics/

        The post-war experience (the “Long Boom”) was so different from the pre-Depression experience that it seems to have swamped memory.

        To say that “WWII ended the Depression” tends to imply that after WWII things were similar to the way they were before the Depression. But they weren’t. In particular, the post-war boom had a major inequality-reducing effect. Things were different in other ways, too. Trade patterns were different. Technology was different. Govt. spending patterns were different. Govt. regulation of the non-Communist economies was different. All these differences add up to a whole new economic world – something much bigger than “ending the Depression”.

      2. nonclassical

        ..downsouth used to post here, and recommended a book written on depression, at that time…illuminating much people may not comprehend. My father (88 years), PhD Stanford (and Prof there), Physics, Chemistry, made mention of some of it last night.

        It is important to note people had little, and were used to it. Also, (Missouri)
        was largely agricultural, and people could eat even when losing farm..farm with others, co-op. Also, there was actually a manufacturing base…

        hand to mouth existence was rule of the day-doesn’t exist today…by the way, our grandfather was oil wildcatter after being brought up with coal mining=engineering…became lawyer and with local politicians invented food stamp program to save those starving…

        side note-dad finished working career as Pentagon 1 grade clearance- military industrial complex…worked star wars and infrared tracking systems…

  3. Rex

    Hey, at least we remain consistent.

    It’s a natural human tendency to try to stick with what you “know”, even in challenging times and under stress to push the pedal down and try harder. One might think with recent examples like the Costa Concordia sinking, that a bit of change in course might be advisable.

    This is showing all the signs of drug addiction, denial and enabling. Maybe we need some people with expertise in solving addiction problems to stage an intervention with our financial institutions and their enabling political families.

  4. polistra

    Ditto Ambrit.

    The facts don’t need any further exploration; we already know how bubbles happen, and we know, thanks to PM Walpole in 1721 and FDR in 1936, how to eliminate speculation. It’s no mystery. The experiments are done, the data is in.

    The only question is, how do we get a leader with the same sanity, guts and authority as Walpole or FDR?

    It was obvious well before the 2008 election that Obama was not such a leader. He assisted TARP instead of opposing it, which told me all I needed to know about him.

    Especially tragic because Obama had the same OPPORTUNITY as FDR. A sane leader in 2009 could have made the necessary decisions by executive order, enforced by the National Guard. The people would have been with him.

    He would also have needed to dissolve Congress and eradicate several non-regulatory agencies, but that would have been the best gift of all!

    1. John M

      Dissolving Congress would mean overthrowing our Constitution — absolutely not.

      I agree on the rest of what you wrote. I didn’t realize how bad President Obama was until late 2010, though.

      “What would Karl Rove do?” I think we understand what happened in the 2008 election means asking that question. The idea was two-fold: elect a President who would continue the Bush Administration policies — or at least not look back and bring them to justice — and also to excite hope and extraordinary efforts (and contributions one can’t afford) to elect the candidate and then betray the hopes. Hit the morale.

      How do we know that the next candidate (in 2016) will do what he campaigns on?

      We have a controlled press. How many people have heard of Lori Klaussitis or Darcy Richardson?

      1. nonclassical

        Governor Christie will be president, 2016…it’s already a done deal, inside fundamentalist $$$$$ land…

    2. Carla

      I agree that Obama is a bitter disappointment, and my hopes were not at all high.

      But this is not about a person. This is about a system.

    3. Carla

      I agree that Obama is a bitter disappointment, and my hopes were not high.

      But this is not about a person. This is about a system.

      Trading in a new face (of any description) at the ballot box won’t change a thing.

  5. jake chase

    I keep saying this until I am blue, but here goes: the idea that securities regulation as presently conducted does anything to prevent fraud is simply academic nonsense. Forcing tiny companies to hire lawyers and accountants to construct monstrous paper edifaces and jump through byzantine bureaucratic hoops before seeking capital in small amounts from people nearly all of whom would only consider taking a plunge because they know the businessmen controlling the ventures is not protecting the investors from fraud. Rather, it is insuring that the businesses involved will be unable to obtain any backers, and the investors will be unable to obtain any corresponding opportunity. Seventy five years of this have contributed to our increasingly top heavy and corrupt and dysfunctional economic (and political) system. It has made the rich exponentially richer and undermined tremendous potential for self improvement among those satisfied to rely upon their own judgment as to the prospects and character of people they know perfectly well. I watched this happen over and over and over for twenty-five years as a lawyer for small businessmen and anyone who looks around can see the results of this idiotic overestimation of bureaucratic foozling and paper pushing masquerading under the name of regulation. Incidentally, you not only have the SEC tarpedoing these small companies, but also state blue sky laws in 50 states doing exactly the same thing while simultaneously genuflecting to every piece of overhyped garbage coming out of the major investment banks and stuffed into the portfolios of institutions where a good many of them go up in smoke when the sophisticated accounting control frauds papered over by however many major accounting firms still exist inevitably come to light.

    1. James Cole

      Jake, I’m afraid you’re just not taking a sufficiently realist approach–current (pre-JOBS Act) regime simply means that if you gather capital outside of the safe harbor of securities law, you’re liable to investors if things go wrong. Honest entrepreneurs need not worry about a thing!

    2. Gerard Pierce

      Jake,

      What you just said is completely correct, but the financial experts here on NC seem to be replaying the old joke where the cowboy asks his partner why he keeps playing roulette when he knows the wheel is rigged. The response is “it’s the only game in town”.

      JOBS won’t make anything better or worse. It might allow a few small companies to raise some money without paying tribute to the existing system. Investors and borrowers will have to work out their own mechanisms to prevent fraud – like maybe an honest arbitration system.

      As far as the current system, Hollywood covers that one with a newer joke: “Who do you have to f#*k to get out of this movie?”

      1. Antifa

        “The future is already here. It just isn’t distributed evenly.”

        As in Spain, in Argentina, and now in America and Europe the future of corporations is cooperative, worker-owned organizations. Investors are workers, investment means working and producing, not being an absentee rentier forevermore entitled to the fruits of other people’s labor.

        Why would any small company seek investors of money only? Find people to put their heart and soul and wallet into the business, and grow it from there.

        See:

        http://www.evergreencoop.com/

        http://www.mondragon-corporation.com/ENG.aspx

    3. Glen

      So let me see if I get this -

      We deregulated since the 80s to get government out of the way, and ended up with an economic implosion because of all the fraud and corruption, BUT the big companies can use the regulations to crush the little companies so we need to deregulate some more for JUST the little companies so that everything just works. Seems to me based on that reasoning we should just wipe out all regulation and that will even work better.

      It’s funny, but this regulation stuff seemed to have been working pretty well from the late thirties to the late seventies.

      I will admit that if we keep bailing out a bunch of crooked big companies that failed, and get regulatory capture when these same crooked companies use their lobbyists to write that laws, then these big crooked companies could use the trillions in taxpayer backed bucks to crush the little guys.

      But that’s why you’ve had guys like Bill Black saying we need to prosecute the crooks and throw them in jail, run the failed and bailed companies through BK and bust them up.

  6. Max424

    John 3:19 – And this is the condemnation, that light is come into the world …

    in the form of the F … B … I … !!!

    Giggle.

    What does the FBI do, does anybody know? I used to think I knew, but I no longer remember.

    Its strikes me that FBI is becoming as worthless as the CIA, which is hard to do, because the CIA has only made about three right calls* since its inception.

    *This means the CIA has a lifetime batting average of about .014, which is 186 points removed from the lowly Mendoza Line (.200). And the more at bats they get, the more the CIA, the FBI, and pretty much every other “Keeping Us Safe” acronym in Washington, see their batting averages close in on the ZERO BOUND.

    Note to Boyz in the Beltway: Having to look up (way up!) at the Mendoza Line is a terribly embarrassing thing.

    1. ScottS

      The FBI was spying on the MOOSLEMS (ooOOoooOOooh! scared yet?). Now they have Occupiers to play cops ‘n robbers with. Hi, spooks! Don’t read the articles here, you might start to question whether or not you’re the good guys any more.

  7. Michael M Thomas

    Could not agree more. I have for some years disputed this idiotic notion that lax regulation is what’s needed to keep the business on Wall Street. What brought money here was transparency, fair dealing enforced by regulation and sanctity of contract. Of course, these needed to be honored not in the breach by the Street itself. What bothers me now, however, is the possibility that Wall Street’s moral demographic has so degenerated that honest regulation is universally perceived as a suckers’ game. Only jail time can undo this cast of thinking.

  8. F. Beard

    Nice Bible quote and one which explains why central banking is so secretive – because it is evil.

  9. digi_owl

    Reminds me of the history of the modern US corporation, and how they came to be by gaming states against each other in a race to the regulatory bottom. This is why i think most US corporations today are chartered in Delaware, as said state basically threw out any and all regulations regarding corporations…

  10. Ed

    I realized that this has been covered on this site before, but is there a list of the specific frauds that this act will enable?

    1. H. Alexander Ivey

      In a nutshell, no.

      The purpose of this posting is not to spell out what the proposed law will allow. That would require a lot of hard, intense work, most of which would almost certainly be a big waste of time. But the real nota bene is that your question, while seemingly innocent, would deflect the posting. Asking questions that can not be answered, or not answered as easily as the asking, is not honest.

      1. nonclassical

        H alex..

        your answer is philosophically (Socrates) dishonest..please, if this is not (Socrates) true, do supply the answers to the question Ed asks? I can hear the sound of one hand from here..

  11. Jennifer Hill

    Dear Jake Cheese –
    The idea that these are “tiny businesses” is ridiculuous. “Moreover, the legislation amends SEC Regulation A, increasing the offering threshold for companies exempted from SEC registration from $5 million to $50 million. The legislation also removes barriers to capital formation for small companies by raising the shareholder registration requirement threshold from 500 to 1,000 shareholders. Similarly, the legislation increases the number of shareholders permitted to invest in a community bank from 500 to 2,000 without triggering SEC filing duties.”
    These are not small businesses. Business folk love that term so we will think that they are talking about my local dry cleaner, nail salon, garage or liquor store. The only thing these regs favor is venture captialists.

    1. jake chase

      dear jennifer howl,

      Reg A is not an exemption, merely a different set of hoops. I am not a fan of JOBS, or a troll either. Just trying to inject some hard earned experience into a discussion among those largely motivated by ideology who remain convinced despite all accumulated evidence that government regulation of securities serves investor interest and prevent fraud. It does neither. What it serves is the Wall Street and corporate interest in denying business access to funding and driving investment through profitable channels maintained by investment banks wired in to the regulatory process.

      1. F. Beard

        I agree with Monterey Jake Cheese (sorry, couldn’t resist :) ) and I would add that if the foundation of our economic system is not sound (and it isn’t) then attempts at regulation are ultimately futile.

        1. nonclassical

          ??…it would be difficult to argue that DEregulatory legislation was not the cause of Wall $treet generated economic destruction…how would REregulaton not be
          a place to start??

          It’s even more difficult to not see Ayn Randers commenting..

          1. F. Beard

            No Ayn Rander am I. Ayn was a fascist.

            But attempting to regulate an inherently dishonest money system is an exercise in futility.

            Keep trying and we will oscillate between economic stagnation and economic instability till we eventually destroy our civilization.

  12. Susan the other

    if JOBS deregulated us back to local economies we can trust, and encouraged self sufficiencies we have lost to big corporations and big trade and big fraud, then that would be a silver lining. Already we have to operate on the only 2 maxims we have left: 1. We will fend off suspicious people with at least a 10 foot pole, and 2. We don’t really trust anybody as far as we can throw them (so that is why we need the trusty 10 foot pole). Since local enterprises operate with local people, all of whom have reputations to protect, commerce would naturally gravitate to the most trusted niche. Any community can come together to produce the things it needs. Or cooperatively purchase what it cannot produce.

    1. JurisV

      STO you awesomely nailed the crux of the matter — Trust!

      I happen to think that it’s the fundamental element in pretty much all of our social interactions. Unfortunately, without rules, it doesn’t work very well when the community gets beyond a relatively small size. Rules, laws, strictures, regulations are absolutely required for groups beyond the “monkeysphere.” (google monkeysphere or Dunbar Number)

      Our civilization breaks down, doesn’t it, if laws are not enforced? If I view history correctly, this doesn’t end well for the elites if trust in the “rule of law” is extinguished.

      Thanks for the clear comment.

  13. Mrs Forbes

    Gretchen is going off again with her latest propaganda – she’s now claiming helping borrowers (taxpayers, your troubled neighbor, the entire US economy, homeless cats and dogs) is somehow going to be a mega-bailout for Banks at the “taxpayers” expense. No, no, no, no.

    1. Old Crumudgeon

      Don’t underestimate Gretchen’s role. She’ll never mention how Banks launder epic sums in our failed prison/industrial drug war. por ejemplo. That saps billions from the “taxpayers”, right there. But..you know the saying. “All the News that’s fit to print”

  14. LeeAnne

    Thanks Bill Black for another inciteful informed view of what’s goin’ on.

    Just one person’s point of view -to be concise -the grand scheme of securitization has transerred US rule of law for the protection of the people, in particular from home owners, to a few guys heading up investment banks here in Wall St. and Fleet St. in the UK.

    They of course in turn operate under TPTB that control the courts and the entire system. Who are these people -the people controlling this scheme? They need to be outed. They need to be known.

    Residence in the UK helps the requisite anonyminity from the people of the US -manages to keep the US electorite ignorant and baffled by it all. Who exactly is pulling these strings. Does anyone care to know? Or are interested decent people going to continue arguing along the same old lines under the same old presumption: that the old paradigms are still in place and ‘reform’ is at all possible.

    Are TPTB really the Ivy League, the Havaad clowns -some concentrated wealth in the old far east UK colonies? UK royalty? What’s goin’ on here?

    Is there someone who knows precisely why Murdoch has been taken down? There’s a clue there.

    1. Antifa

      Murdoch and crew weren’t taken down. They got damned sloppy and shat themselves in a very public manner. They pooped their own bloomers, repeatedly, to the point that no one in power could quite manage to overlook the stains they left on the carpets and furniture.

      No amount of newsprint, no amount of paper pounds could clean it up, that’s all.

      1. LeeAnne

        You’re so certain. They were however conducting business as usual -the Murdochs & co. that is. But young Bill crossed a line when he featured photos of the prince royal walking down an upper east side street with a known convicted pedaphile; the accompanying story going into some detail about their shared interest in partying.

  15. Nicotine Slump

    Things are worse in India.. or are they? :

    “In a nation of 1.2 billion, India’s 100 richest people own assets equivalent to one-fourth of the GDP. “

  16. pelham

    Excellent post. But I question whether holding out hope for any kind of sane regulation is a good idea. Say the JOBS Act is killed. Well, in all likelihood, something just like it or worse will be quietly introduced and passed a little later on. Or, just as likely, the folks behind the JOBS Act will get what they want by simply grabbing it regardless of any existing safeguards. Why bother with legislation?

    The problem is that people can’t take it all in. The complexity of our financial system and the regulations that are supposed to keep it in check utterly and forever render it impossible to achieve any kind of effective transparency. Complexity defeats transparency every time. And without the ability to see what’s going on, there’s a veritable labyrinth of dark corridors in which rot can grow.

    Simpler solutions are demanded. And the simplest solution is, I’m led to believe, is to trash the system itself and start over.

  17. Rehabber

    Regualtion is another means by which the exisitng corporations increase their stranglehold on our daily lives. They can afford the legal bills to satisfy the schemes, can hire the regulators when they leave office, and have the resourcs to make sure their voices are heard during the drafting of the legistlation and the regulations. Food, drugs, agriculture, banking – they utilize the regulatory structure to secure their marketshare and crush competition.

  18. ECON

    Excellent post by Bill Black. As an aside, I as a Canadian aware of the total preoccupation of Americans with the Red Menace of the Iron Curtain and the nightmares of communists under your beds are now in 2012 confronted with an internal enemy doing far greater harm to USA and its values and democracy. It is the politburo of Big Business and Big Government and Big Courts that have corrupted America beyond recognition.

  19. Johnny Clamboat

    “The FCIC report explained repeatedly how the three “de’s” (deregulation, desupervision, and de facto decriminalization) had produced the criminogenic environment that drove the financial crisis.”

    Can anyone name a single act of deregulation outside of the Financial Services Modernization Act of 1999? Just one.

  20. nonclassical

    Robert Rubin deregulated banks under Clinton, Reagan administration undid many regs. Besides Texas RepubLIEcon Senator Phil Gramm’s quid pro quo (for his wife-Enron), Bush Treasury Sec Paulson 2003, prior to becoming ts, went to SEC to deregulate LEVERAGE=collateral necessary to hold for securities…

  21. John F. Opie

    The only way that the JOBS legislation makes sense is to realize it is the way it is by design. In other words, this attempt to prevent fraud enables the fraudsters to continue their work.

    Of course CFIC was also ignored: it would simply get in the way of the continuing fraud.

    The corruption stinks to high heaven, but where are the modern untouchables to counter it? Instead, we have Chicagoans in charge of the whole country whose task is to divide the country – that way you can set one ethnic group against others, manipulating them while keeping them under control and voting for “their” candidates – and continue to perpetuate Chicago-style fraud (not outright theft, mind you, simply crony capitalism).

    Sad turn of events. But predictable, given the way that the Democratic Party has been headed for the last, say, 30 years.

Comments are closed.