Bush seeks financial regulation overhaul
By MARTIN CRUTSINGER, AP Economics Writer
28 March 2008
WASHINGTON - The Bush administration is proposing a sweeping overhaul of the way the nation's financial industry is regulated.
Gee, I thought government regulation was uniformly bad!
"Military intelligence" has long been the exemplar of an oxymoron.
I'd like to suggest another exemplar: industry self-regulation.
There is nothing wrong with a focus on the bottom line, but this focus is not compatible with "self-regulation". There is, in fact, a "greater good" - involving societal stability. The lone company - financial, food services, semiconductor, textile,... whatever - has NO incentive to behave rationally with respect to anything other than the bottom line.
Free-market collections of local optima need NOT lead to societal optima.
"To promote the general welfare" is one of our country's strategic objectives. This may sometimes entail regulating private enterprise.
Milton Friedman was wrong.
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