David Rocker says a crisis is a terrible thing to waste

August 25, 2009  


By David Rocker Unfortunately that is exactly what we seem to be doing. Politicians and regulators, sensitive to the fury of investors and voters, too often focus on relieving obvious symptoms rather than addressing the flaws in the underlying structures that created the problems. It is easier to visibly impose new regulations rather than tackle the more politically embarrassing issue of why existing regulations were insufficient or not adequately enforced. As a result, bureaucracy increases, efficiency diminishes, and root causes go unaddressed.

In this respect the SEC, egged on by various members of Congress, has opted for the "round up the usual suspects" approach to the stock collapse and plans to again restrict short selling. This is terrible policy and the opposite of what is needed.

The stated mission of the SEC is to "protect investors, maintain fair, orderly and efficient markets and facilitate capital formation." Efficient markets can...

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