Regulations don’t mean larger government, they mean responsible corporations.

I work in compliance in securities at a prominent bank- one that has not been mentioned at all(yet) in this economic meltdown. One that was responsible in its lending, didn't jump when the deregulated government said we could, one that looks to the longterm for its goals.
A couple of years ago, when our compliance department said we needed something to ensure strong compliance, it was given to us by senior management. There was a respect, not only for us as employees, but for the guidelines set by the government entity that related to our business. We worked our butts off to meet the regulations, and management cheered when we succeeded.

The point is, regulation does not mean larger government. Regulations don’t necessarily require larger government, they mean corporations spending a little to meet certain standards, and all the money they spend to meet those standards are past straight to the investor- not the taxpayer, not any customer. Whatever we needed, it meant we charged a larger fee to the security trust, which meant the large investors to the trust may have seen a very minimal decrease in return. And the government entity that supervised was a small department, and heck, it created jobs too.

The long standing idea that regulations means a larger government, and that it will cost more is just foolish. Holding corporations to certain standards means just that, and it doesn’t require a large government department to ensure that.

Does anyone believe that the NBA would be better without Refs? Would there be more or less fouls called? In baseball without an umpire, would the catcher and batter be able to agree which pitch was a strike or ball? That’s laughable!

The reality is it doesn’t cost that much to have governmental entities observing these functions, and these functions don’t operate without these third party eyes. That is what it means for a government to set up an economy. That is how a fair market thrives, only when guidelines are created and all parties are held accountable. That is why it is patriotic to pay taxes to a government that creates the best economic system that can work for everyone involved.

I guess I've just been hearing that a lot from the Repubs- back at the convention, even.

I think the small government meme still has some life with a certain number of voters.

That act basically represents the first bona fide attempt by the federal government to intervene in the markets. Then, the government intervened to break apart monopolistic enterprises. Later on, it was the New Deal and Great Society programs from the minimum wage to Social Security to Head Start. The SEC should have the authority to monitor and regulate the derivatives market, but I don't believe that sector is monitored at all.

When I worked in a bank (one that no longer exists) 35 years ago, before the regulations came tumbling down, I heard one wag say something that stayed with me. He said, "Bankers need regulations because most of them are too stupid and greedy to do business well without them." Sad to say, he was right.

For most of my career, I was in the manufacturing sector. (You know, the kind of business that got shipped overseas first?) With an extensive grounding in Information Systems (from soup to nuts), I found myself 'graduating' to quality assurance, internal audit, management review, and operational analysis. (Maybe my ability to 'hack' our systems, no matter where, had something to do with it. I had my "white hat" firmly attached to my skull.) That, of course, gave me an extensive familiarity with such things as Baldridge, life-cycle management, TQM, GAAP, GAAS, ISO-9000, and a host of background materials ... my favorite was Drucker. (I'm a very conventional business fellow.)

One syndrome was clear, no matter where or what I saw. It was the lazy, spoiled ("privileged"), stupid folks that cheated and played games attempting to make 'quality' a sales motto and mere window-dressing. When they weren't detected and weeded out, they took over and destroyed departments, branches, and whole companies. The funny thing was that it CREATED more work than needed, made it impossible to work cooperatively and collaboratively, and INVARIABLY increased the downstream workload and costs. It also chased the customers away - they're not that stupid.

The vast majority of employees try their damnedest to do good work. The audit teams I led always met with skepticism when we (sincerely) said "we're here to help you." Thus, I made CERTAIN we found a way to prove it early in the engagement. I had a "contract" with MY management and the auditee's senior management that ABSOLUTELY NO SCAPEGOATING would be permitted as a result of our audits - except in clear cases of theft or fraud. We held 'em to it, too. We knew that folks were often put in positions where "someone else" would benefit from their failure ... and often contributed to it. I made sure that those scapegoat-nominees were part of the solution - and visibly rewarded when they succeeded. Very visibly. It had an enormously positive impact on field operations. The people actually noticed ... and liked it.

Fish rot from the head ... and it's a maxim I've seen over and over borne out.