The Business Case for Tough Regulation
This toughly argued lead article in Bloomberg Business Week on the BP oil leak disaster is a keeper – it sets out a very strong endorsement of the key regulatory role of government in curbing the dangerous excesses of capitalism.
“This is a moment to think big and creatively. As distant as risky drilling rigs off Louisiana may seem from the New York financial laboratories where wizard bankers synthesized subprime credit derivatives, Obama could explain the important connections: how, after decades of antiregulatory fundamentalism in Washington, the feckless Minerals Management Service became the Securities & Exchange Commission of the oil business.
It is no coincidence that staff members at both agencies watched pornography on government computers when they should have been monitoring their respective beats. Although corruption and incompetence seem to have run deeper at the soon-to-be-dismantled MMS, the zeitgeist of the two places was similar, according to investigations and congressional hearings: Industry was to be trusted, even when government overseers had no more idea what transpired on the trading floor at Lehman Brothers or Bear Stearns than they did on the ocean floor beneath the Gulf of Mexico.
The question is: What will Obama do about it?
One route to political rehabilitation would be to redefine how government interacts with business. The goal he should articulate is protecting capitalismâ€”and the society it’s intended to serveâ€”from the tendency of the profit-minded to go to extremes.”