With all the problems on Wall Street these days, it was only a matter of time before big government advocates (AKA Democrats) started clamoring for more and better oversight. After all, the 4 agencies the Feds have already created to manage mortgages were not enough to prevent all the problems. So more agencies and more regulation will make it better?
No matter how much regulation you put over the financial system, the government can never stop all market fluctuation and downturns. The Soviets could not even do that with a communist government. More regulation and government bureaucracy will just make doing business more expensive.
The truly wonderful thing about capitalism free of government interference is that it kills off the wasteful producers. Companies like Bear Stearns should not be allowed to survive as are all the other business that can not be profitable. Profit is what shows society your firm is benefiting people. It means that businesses are taking inputs (raw materials, labor, etc.) and turning those inputs into consumable products that people value more. On the other hand, firms losing money show they are really wasting resource by taking inputs and turning them into products that are less valuable to society.
More government will not make things better, just more expensive and time consuming. We have to understand that there will be turmoil some times as markets correct. The patience to wait this turmoil out is imperative. But as usual, politicians show no propensity for patience.
Washington Split Over More Regulation- NY Times
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