The reason you can’t give regulators (of Wall Street or Big Oil) too much ‘discretion’ is that they’ll always be outsmarted by the private sector. That’s why standards have to be spelled out in the law.
A common thread runs through the two biggest crises of our present era: the financial catastrophe of 2007–09 and the ongoing gulf oil spill, which now ranks as the worst in U.S. history. People who work for private companies—particularly those in high flying, high-tech industries like Wall Street and Big Oil—tend to outsmart the people in government who are supposed to be watching them. In the case of Wall Street, we now know that an entire generation of regulators was bamboozled by Street whizzes who sold them on everything from the irrelevance of Glass-Steagall to the low-risk benefits of unmonitored derivatives trades. The major oil companies, if anything, did an even better job of fooling one and all in Washington that they knew what they were doing with deepwater drilling. “We were sold a bill of goods by BP and other oil companies going back several administrations,” said Rep. Frank Pallone (D-N.J.), who has vociferously resisted Barack Obama’s efforts to expand offshore drilling. “During the whole time I’ve been in Congress, the big oil companies have been telling us they can drill as deep as they want without risk.”
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This post was written by admin on July 5, 2010
