Failure to regulate damages U.S. economy and imperils citizens

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This topic contains 3 replies, has 3 voices, and was last updated by  Peter Sperry 7 years, 9 months ago.

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  • #102897

    Bill Brantley

    “[Minerals Management Services’] bad behavior was unusually egregious, but it’s hard to think of a recent disaster in the business world that wasn’t abetted by inept regulation. Mining regulators allowed operators like Massey Energy to flout safety rules. Financial regulators let A.I.G. write more than half a trillion dollars of credit-default protection without making a noise. The S.E.C. failed to spot the frauds at Enron and WorldCom, gave Bernie Madoff a clean bill of health, and decided to let Wall Street investment banks take on obscene amounts of leverage, while other regulators ignored myriad signs of fraud and recklessness in the subprime-mortgage market.”

    The Regulation Crisis

  • #102903

    Peter Sperry

    From what I have read of the inspections conducted prior to the accident, we have a “strain the knat and swallow the camel” problem with federal regulations. Inspectors arrive with a 100 to 200 item check list and hand out citations like candy for trash in the wrong container but fail to discover the use of substandard seals on the drill pipe. Unfortunately, it is a pattern repeated throughout much of government regulation (and private sector due dilligence). Financial regulators regularly issued citations to banks for minor bookkeeping errors while failing to say anything about the complete lack of monetary value to support their credit default swaps. We would be better off across the board if government and private sector standard setting organizations would cut the number of regulations by 3/4 and then vigerously enforce the ones that remain. Trim the regulatory and standards writing staff in by 2/3 and double the number of on the ground inspectors. Do away with 80 percent of the potential citations and impose draconian penalties for violating the other 20 percent.

  • #102901

    Henry Brown

    So what’s new!

    for those really senior citizens who can recall the 1950’s when environment regulations became the the latest buzz word(s) and depending on how much “political” power you had depended on how much your industry was regulated…
    or the early 1960’s when somebody in government realized that there was a need to regulate the communication (read TV stations) industry and lo and behold if you were a key player read the major networks (ABC, CBS, & NBC) about all the regulations did was limit the competition

    Probably could go further back but I am just a youngster 🙂 (GRIN)

  • #102899

    Bill Brantley

    @Peter and @Henry – Thanks for the comments. It’s nothing new other than the magnitude of the problems seems to be bigger and more threatening.

    In my first government job as an environmental paralegal, I saw a lot of what Peter describes. A lot of attention to the symptoms but very little done about the root causes. And don’t forget the ability of well-financed companies to delay and eventually stop any regulation. That realization hit me the day that I discovered that two good ole boys who burned some machines for the copper paid more in fines than a large chemical company that spilled toluene into the Kentucky river.

    Personally, I think a major step forward in regulatory reform is to abolish corporate personhood. Then, we can do away with most of the regulations and enforce the few that are left more effectively and efficiently.

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