Wall Street's "Nuclear" Disaster
Japan's nuclear disaster at Fukushima was caused by a negligent nuclear industry and the people responsible for regulating that industry. The claim was made in a recent report released by a 10-member panel appointed by the Japanese Parliament. (You can read about the report and the panel by clicking HERE.)
Apparently, the industry influenced the regulators so that regulations wouldn't be tough enough and regulations that existed weren't enforced enough.
Sound familiar? It should.
People who love when government makes new regulations don't like to face the fact just making regulations doesn't always prevent problems. The fact is regulations are enforced by people. People can be influenced, even corrupted, by those they are assigned to regulate. It happens all the time.
Why is it important to face this fact? Because if we don't, we just get stuck in a loop. The loop consists of government making new regulations, the regulations not being properly enforced, government making more regulations, the regulations not being properly enforced...and on and on. Got the picture?
After the financial disaster of 2008, some people called for more regulation of Wall Street. But there was very little analysis of whether regulations that existed at the time were enforced properly. For a very brief period of time, you could have read a few stories about what really goes on with regulators - how many of them come from the industry they are supposed to regulate, then - after a stint as a regulator - return to that same industry.
And - for an even more brief period or time - some criticized such a system by stating the obvious: People who want a job in an industry aren't going to go after the people they are hoping will hire them.
Have you heard much noise about this lately? I didn't think so. Oh, and by the way, the system that was ever-so-briefly critiqued is still in place. Nothing has changed.
So would it be all that unusual if the same thing happens in Japan? I don't think so. But, hey, the Japanese may fool us and actually do something to reform the system. Wouldn't that be refreshing?
As for Wall Street, it may be that 2008 wasn't enough of a disaster. It may be that before any real change or reform of the system occurs, we'll have to undergo some sort of "nuclear" financial disaster. I hope not. But better to be prepared.
Apparently, the industry influenced the regulators so that regulations wouldn't be tough enough and regulations that existed weren't enforced enough.
Sound familiar? It should.
People who love when government makes new regulations don't like to face the fact just making regulations doesn't always prevent problems. The fact is regulations are enforced by people. People can be influenced, even corrupted, by those they are assigned to regulate. It happens all the time.
Why is it important to face this fact? Because if we don't, we just get stuck in a loop. The loop consists of government making new regulations, the regulations not being properly enforced, government making more regulations, the regulations not being properly enforced...and on and on. Got the picture?
After the financial disaster of 2008, some people called for more regulation of Wall Street. But there was very little analysis of whether regulations that existed at the time were enforced properly. For a very brief period of time, you could have read a few stories about what really goes on with regulators - how many of them come from the industry they are supposed to regulate, then - after a stint as a regulator - return to that same industry.
And - for an even more brief period or time - some criticized such a system by stating the obvious: People who want a job in an industry aren't going to go after the people they are hoping will hire them.
Have you heard much noise about this lately? I didn't think so. Oh, and by the way, the system that was ever-so-briefly critiqued is still in place. Nothing has changed.
So would it be all that unusual if the same thing happens in Japan? I don't think so. But, hey, the Japanese may fool us and actually do something to reform the system. Wouldn't that be refreshing?
As for Wall Street, it may be that 2008 wasn't enough of a disaster. It may be that before any real change or reform of the system occurs, we'll have to undergo some sort of "nuclear" financial disaster. I hope not. But better to be prepared.
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