First, let’s take a quick read of an excerpt from Matt Welch at CNN.com today on whether economic regulations were cut or strengthened over the past decade:
Expecting regulators to do their job well, let alone magically prevent whatever private-sector outcomes we do not like, is as fantastical as the assertion that George W. Bush was a deregulatory president.
Wait, what? Didn’t we just read in Time magazine that “From the start, Bush embraced a governing philosophy of deregulation”? That’s a comforting narrative for those trying to “restore” regulatory oversight of Wall Street. But it’s false.
According to Mercatus Center economist Veronique de Rugy, federal expenditure on regulatory enforcement in finance and banking, when adjusted for inflation, “rose 29 percent from 2001 to 2009, making it hard to argue that Bush deregulated the financial sector.” This was a sharp break from Bill Clinton, who actually cut financial regulation spending by 3 percent, de Rugy found.
The last major bit of financial market regulatory overhaul, which has already disappeared down the public memory hole, was the 2002 Sarbanes-Oxley Act, passed in the wake of the Enron debacle and other corporate scandals.
When signing it into law, Bush declared: “No more easy money for corporate criminals, just hard time. …The era of low standards and false profits is over.” I guess someone forgot to tell Bernie Madoff.
But does it matter?
To the mind of the pro-regulation, anti-free market set, all outcomes are evidence of the need for more government regulation of business.
If there’s a breakdown, loophole or Enron-scam, it’s a sign of the need for more regulation.
If things run smoothly, it’s a sign we need more of the regulation that keeps things running smoothly.