Available Now! (click cover)

America's Counter-Revolution
The Constitution Revisited

From the back cover:

This book challenges the assumption that the Constitution was a landmark in the struggle for liberty. Instead, Sheldon Richman argues, it was the product of a counter-revolution, a setback for the radicalism represented by America’s break with the British empire. Drawing on careful, credible historical scholarship and contemporary political analysis, Richman suggests that this counter-revolution was the work of conservatives who sought a nation of “power, consequence, and grandeur.” America’s Counter-Revolution makes a persuasive case that the Constitution was a victory not for liberty but for the agendas and interests of a militaristic, aristocratic, privilege-seeking ruling class.

Wednesday, December 24, 2008

Madoff Scandal Exposes Government Failure

The common reaction to the Bernard Madoff $50 billion financial scam was wholly expected. As Los Angeles Times columnist Tim Rutten wrote, “The lesson is one that becomes clearer with each excruciating turn of the Wall Street screw. The long, bipartisan experiment with financial deregulation has failed utterly. The argument that a return to rigorous oversight will somehow stifle Wall Street’s ‘creativity’ is no longer convincing. Whatever its theoretical costs, regulation is dramatically cheaper than intervention. And absolutist insistence on the superiority of ‘individual choice’ and ‘free markets’ now is exposed as so much vacant rhetoric. Any system that permits a scam artist like Madoff to deceive not just widows and orphans but also sophisticated investors, like Fairfield Greenwich Group’s Walter Noel and Hollywood’s Jeffrey Katzenberg, isn’t a market at all; it’s a shooting gallery.”

The last sentence is a tipoff that something is wrong with this outlook. Financial regulation is usually proposed to protect the unsophisticated. People knowledgeable about finance and securities presumably can take care of themselves. But what makes the Madoff scandal so noteworthy is that the most sophisticated types were taken in, even though several experts sounded alarms. Why?
The rest of my op-ed, "Madoff Scandal Exposes Government Failure," is at The Future of Freedom Foundation website.

1 comment:

David Johnson said...

Madoff committed a crime, but the punishment will fall on those who did not. This is financial gun control, and will no more prevent financial fraud than trigger locks will prevent murder.