Our earlier post noted the regulatory capture of the SEC by Wall Street. Later in the WSJ piece we referenced, SEC Chairman Mary Schapiro hinted that the issue might be even worse. She blamed the agency’s ineffective oversight of Lehman Brothers was partly due to insufficient staffing.

So that set me off looking for how the SEC staff and funding levels have changed over the past few decades relative to their workload .

What I found was deeply disturbing: Over the past 30 years, the financial world has grown exponentially in size, breadth and complexity of products, trading volume, and total assets under management.  In terms of personnel, assets under management, numbers of trader, managers, sales  people,  and mathematical PhDs., who work on the street increased dramatically.

The SEC did not.

Indeed, almost by design, the SEC has done a mediocre job keeping up with the finance sector over the past few decades. Their budgeting and salary allowances was far outpaced by Wall Street. The bodies the SEC can throw at any problem are dwarfed by what Wall Street manages. Consider that there are 1,000s of quants working on Wall Street. At the SEC, there are approximately zero.

The SEC appears to have suffered from what can be best described as a benign neglect. However, if you conclude it was  malignant congressional intent, you wont get much of a fight out of me. The agency was all but abandoned

Consider this March 2002 GAO report to Congress on the SEC. To summarize their conclusion:

“U. S. securities markets have grown tremendously and become more complex and international. As a result, SEC’s workload has increased in volume and complexity over the past decade. As illustrated below, around 1996, SEC’s workload (e.g., filings, applications, and examinations) started to increase at a much higher rate than SEC staff years devoted to this workload. Although industry officials said that they respect SEC as a regulator, they said that SEC’s limited staff resources have resulted in substantial delays in SEC regulatory and oversight processes, which hampers competition and reduces market efficiencies. In addition, they said information technology issues need additional funding, and SEC needs more expertise to keep pace with rapidly changing financial markets. Finally, the officials said that SEC’s reliance on a small number of seasoned staff to do the majority of the routine work does not allow those staff to adequately deal with emerging issues.

The GAO also identified other budgetary related issues: Low salaries, inexperienced staff, high turnover, outdated equipment, etc.

The charts tell all:


Percent Change SEC Staff Workload: 1991 -  2000

All charts sourced via GAO analysis of SEC data


This leads us to asking Congress to accept responsibilty for the ineptness of the SEC. Congress failed to provide adequate funding for the agency. It didn’t require tax dollars, it could have been funded through SEC action, fines and settlements.

Congress did not need to deregulate Wall Street — they only had to defund the SEC –which is what effectively happened. Hence, the chief cop on the Wall Street beat was outgunned, overmatched, undermanned and out-lawyered by the industry they were supposed to be regulating.

How can that possibly have been any good for investors . . . ?


More charts after the jump . . .


SEC OPERATIONS Accountability Integrity Reliability Increased Workload Creates (GAO-02-302)
A report to Paul S. Sarbanes, Chairman, Committee on Banking, Housing, and Urban Affairs, U.S. Senate; Christopher J. Dodd, Chairman, Subcommittee of Securities and Investment; and Jon S. Corzine, Member, Committee on Banking, Housing and Urban Affairs, U.S. Senate.
GAO, March 2002

Number of Times Stock Market Trading Volume and the Value of IPOs Have Increased between 1980 and 2000

Percent Change in Workload and Staff Years for Selected SEC Activities

SEC Fees Collected and Appropriated Funding, 1991-2001 (billions of dollars)

Source: SEC.

Category: Legal, Politics, Regulation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

58 Responses to “SEC: Defective by Design?”

  1. Mannwich says:

    But Barry – it was “TOO much regulation” (and CRA, Fannie, Freddie) that caused this mess. Stop trying to destroy the libertarians’ convenient straw man.

  2. Ya think the IRS has such a short leash? Me neither

  3. farmera1 says:

    Starve the Beast. Remember that. This all fits into a mass psychosis this country has been suffering for a long time.

    After all “Free” markets don’t need a regulator/cop or someone telling them what to do. They are self regulating. The Federal government should only provide an army (and that is per the Constitution so my friend insists) . It just doesn’t happen to be the Constitution I read, but many people believe it.

    Barry, I hear this stuff all the time. I live in a very conservative rural area. The people firmly believe the less regulatory/government foot print the better. I’d say at least 80% in this poor rural area feel this way. After all it is hammered into them on the radio, (just listen to late night talk shows) Fox, etc.

    The 80% would be all for defunding the SEC, doing away with the EPA, out lawing unions etc.

    The funny thing is most of these people are rather poor and many live off Social Security. THe irony is almost too much.

  4. torrie-amos says:

    during 2001 recession it was well know bush gutted all regulatory agencies, cutting some budgets by 50%

    now what do folks do, regular employee’s do, be thankful u have a job, keep your mouth shut, don’t make any wayves

    which is what we got, enronesque

  5. [...] Defective By Design (The Big Picture) Barry Ritholtz takes a look at how the SEC has not kept up with the growth and complexity of Wall [...]

  6. I maintain it’s not the quantity of staff; it’s the quality.

    Far too many lawyers and not enough people with serious trading experience. they can understand a problem when they see it. The lawyers cannot.

  7. Mannwich says:

    This is a CULTURAL problem and it starts at the top. When incompetence, cronyism, and corruption are not penalized (e.g. by FIRING people and replacing them), then we get the same behavior (X 10) over and over again. It’s not that complicated. We need smart regulations that are ENFORCED by smart, tough people who will be supported AT THE TOP when the sociopaths try to take them down, not necessarily more regulations.

    The Sheeple merely follow what the elite are doing and we are leaderless and rudderless in this country. Everyone looking out for numero uno first, last, always.

  8. Transor Z says:

    Barry, there is an underlying partisan issue masquerading as a “systemic” problem here. See, for example, the Bill Moyers interview a few weeks back with Thomas Frank: http://www.pbs.org/moyers/journal/01152010/transcript4.html

    The Executive branch controls staffing levels and the pace at which federal agencies can promulgate new regulations. There is a well-documented pattern of deliberate under-staffing and/or inappropriate staffing at oversight agencies during republican administrations. These conditions satisfy the self-fulfilling prophecy that government is bad and government workers are inherently incompetent.

    Government has never paid as well as the private sector but offers additional job security and often very decent benefits as something of a trade-off. This is why the lone honorable lawman fighting the rich railroad/cattle baron and his minions and corrupt judges/local politicians has been a plot staple of westerns since forever.

  9. Mr. Reality says:

    Hmmm 2002…..who controlled all branches of government at that time? That’s right! That a boy, Brownie!

  10. Chief Tomahawk says:

    So Wall St. got the opportunity to self-regulate. They didn’t. What are they liable for to Main St. in order to “make it whole”?

  11. Mannwich says:

    @Chief: If you’d ask them – nothing at all. This “wasn’t their fault”. Now let’s all move along. Nothing to see here.

  12. schirimiester says:

    What a fuster cluck.

  13. Crabbybill says:

    SHOCKED! Shocked I tell you..
    Starve the beast was a crucial part of the tactics espoused by the Booze Allen and Andersen ilk of the 90′s. The line went something like “change is not easy– it takes time to weed out all of the poor practices that need to be eliminated…”. The approach was simple- feed/support those efforts that further the ‘new’ direction while starving those that are ‘resistant’ to change. This is how compliance audits are ‘defanged’. Prioritize puff audits and reports while telling the ‘zealots’ that if those other low priority ‘concerns’ are so important, work on them on your dollar! Take’m home…

    Legal staffs actually conducted plausible deniability sessions specifically stating that all of those ‘negative’ reports need to be eliminated at the source. My favorite quote was ” why would you ever want to know that you are not in compliance?” The best way has always been to force the naysayer to bleed his own blood if he was so serious about the effort or better yet don’t let the door hit you in the ass on the way out!

    Think GMAC, ResCap and Ditech etc…

  14. dead hobo says:

    Sorry, it’s not Washington’s fault. I did it. In the last thread I placed a curse on the world and removed all reasonable financial regulation for what I thought was the past year. I retained my memory of the correct events. My bad. I went back a little further than intended. Sorry.

    Things were pretty good before my little joke. Congress was faithfully representing the needs of the majority of the People. The SEC kicked ass and was highly respected and feared on Wall Street. Gas was 98 cents a gallon. The S&P was 2500 and dividends averaged 9%. You couldn’t sell a stock that didn’t pay dividends. People were in awe of the Fed and it’s incredible perfection. Ben Bernanke won 2 Nobel prizes and NY City changed it’s name to Greenspan, NY in honor of the world’s smartest man. You have no idea how much I regret the error.

  15. Marcus Aurelius says:

    Ya’ get what ya’ pay for, and we’ve paid for shit.

  16. Chief Tomahawk says:

    Mannwich, they might try that, but a growing discontent among the populace may dictate political will to the contrary.

    Amendment #28:

    “Any person convicted of engaging in a Ponzi scheme will have their ill-gotten gains clawed back. No more big-ass estate(s), pimpin ride(s), trophy wife, trophy mistresses, etc. No transferring of said property titles, bank accounts, etc., into your wife’s name, kidz name, dog’s name, mistresses’ name, etc. to hide ill-achieved assets. Further, depending on the level of sociological damage of said Ponzi scheme, offenders will spend the rest of their days tending the grounds of Arlington National Cemetery to repay those who made the ultimate sacrifice in honor of their country and for the future of their children (NO CLUB FED!)”

  17. Chief Tomahawk says:

    By the way, Amendment 28 comes with no grandfather clause; rather it’s The French Revolution’s ‘mob mentality’ modern guillotine.

  18. Cynic_FA says:

    Not buying it. you say we could have more incompetent regulators and they would not be more incompetent. This is standard Washington CYA. My agency failed badly, so give me more money and I can do better.

    The SEC staff which recommended Alternative Net Capital rules was not understaffed, they were wrong. The SEC staff mentioned in the previous post which tried to return to analyst lying and cheating was not understaffed, they were wrong. The SEC had staff on locatiion at Lehman brothers with the specific mission of investigating Beat Stearns type risk. They ran models which showed that Lehman Failed every kind of stress test. They let Lehman run a new Lehman designed stress test, which was the only one which said Lehman might survive. That staff new Lehman was a risk, someone at the top told them to stand down and keep their mouths shut. The SEC top brass focusing on Lehman after Beaar Sterns had enough staff for that high priority task, they were just wrong.

    We need to demand higher performance from regulators, not just pay for more of the same.

  19. Lugnut says:


    I believe this also answers your prior question as to why Dodd was leading the legislation on financial reform. Same answer; lack of desire for enforcement or reform. Regulatory capture – It’s the new capitalism.

  20. jhunt says:

    I got one. What about changing the pay structure at the SEC? Hire on new lawyers/traders/whomever and say ‘go find wrongs and tell us.’ If they result in a fine/action/penalty, you get a direct cut. Wall Street does it. Why can’t gubment do it?

  21. Mannwich says:

    @Cynic: One way to do that would be to go find smart, competent and tough industry insiders who actually have some integrity (there have to be some, right?) and PAY them big bucks for their services, even INCENT them to root out the criminality and corruption on Wall Street. It’s all about competence and incentives. If you align the two, then usually success follows. However, it’s plain to see that there’s a strong motivation to do just the opposite so that Wall Street can continue to do whatever it pleases. IT takes real guts and leadership to change this, but unfortunatley we have neither right now in positions of leadership.

  22. tagyoureit says:

    LOL, privatize teh SEC. It’s a growth industry ripe for plunder.

    Notice workload surpassed employees when everyone had email in 1996. Gotta love the internets

  23. Mannwich says:

    @jhunt: You beat me to the punch by one minute.

  24. Cynic_FA says:

    BTW Barry was calling for heads on stakes. I want to see that tax cheating, wall street loving, Goldman Sachs / AIG bailout paying( at par), anti financial reform $*^%$$*$ Geithner with his head on a stake.

    Where is the public outrage about this despicable excuse for a “Public Servant”. Geithner is so totally loyal to Goldman at the expense of Main Street that there needs to be calls of “Off with his head”

  25. Mannwich says:

    @Cynic: I think people just shrug their shoulders at this behavior now. Anything goes. It’s all good now, especially if you have the power Timmy does.

  26. markd says:

    Here’s a cold hard slice of reality.

    1. What went on the past few years due to dereg is for the most part not illegal

    1a. Therefore no punishment for the guilty.

    2. 1 & 1a. above are proof that John Boehner and anyone who oppose new regulations are mega asshats.

    3. Real world example: About 10 years ago, there was a lot of logging going on here in Pa., and a fair amount of loggers were not respectful of property lines. There was so much of this theft going on the legislature finally got there heads out of their butts, and made it the law that if you cut down someones tree that you had not contracted for you had to pay triple damages.(an old growth veneer grade black walnut was going for $3000.00+) This caused the surveyors to get a lot of work marking property lines,
    and it bankrupted a few thieves.

    4. see how this works class? If you remove the profit from bad behavior you get a lot less of it.

  27. bondjel says:

    Yup, that’s what I commented in a recent post you had on this issue, Congress has emasculated the SEC systematically. It would be interesting (but time consuming) to dig deeper and find out which Congress members are the worst, i.e., which cut the SEC most readily. I suspect Joe Lieberman would be on the list as he has been very aggressive in helping out corporations and threatening even the FASB when they don’t do what he likes.

  28. dead hobo says:

    markd Says:
    March 18th, 2010 at 12:35 pm

    If you remove the profit from bad behavior you get a lot less of it.

    HA HA HA. Funny Guy. If you do that, you’ll destroy Wall Street. Things works as they do for a reason. The current way must be the best way since nobody except a few whiners don’t like it.

  29. @ Manny and jhunt

    The only problem I have with the incentive side is that it might start working like the police do with ticket quotas. Sure, they get legitimate offenders but probably just the easy ones at the bottom of a hill.

    Maybe they should offer set-for-life rewards for insider whistle blowers who can get the evidence to prosecute their companies. This could be paid for with fines. That way problems could be caught early and before the backroom boys have a chance to fire up the shredders

  30. Mannwich says:

    @Common: That’s a good point. I thought of that too but there has to be a way to INCENT some toughtness, competence, AND honesty, right? Is our culture really THAT rotten and bankrupt?

  31. martin66 says:

    Farmera1 is on target with this. Journalist Thomas Frank has written extensively on the blatant cynicism of today’s GOP with regards to government and public institutions. (see The Wrecking Crew). Until the country begins to see that “every man for himself” leads to a total breakdown of social order as might be found in many third world countries, this government-hating, anti-tax hysteria meme will continue to be successful. Apparently the legacy of the past ten years, the financial devastation and our vastly lowered ability to affect outcomes in the world has not been enough to convince people that the philosophy that got us here is a bankrupt one.

  32. Moss says:


    I don’t think the sentiment you describe is limited to the poor rural areas. I live in the burbs of NYC and it is predominantly a Republican town. I am amazed at the hypocrisy of the people who rail against the gov while at the same time collecting disability insurance. It is truly amazing. When I bring up the inconsistency they usually walk away in a huff or want to punch me out.

  33. torrie-amos says:

    Leadership begins and ends at the top, what u focus on, and or monitor u will get.

    Our political leaders factually act like bickering insipid divorced parents, thus, no one pays attention to them, does what they say to do, and never believes they will change, thus, everyone does whatever they want whenever, and when problems arise, well, parents stop for five minutes, oh me oh my, my little so and so, we haven’t paid attention to u, here’s some love.

    It’s tiring for all, and while it all goes on, sludge thickens………………

    It is a fact people believe the government will bale them out, always and completely.

    This time around they will all say, no one saw it coming, when all the signs are overwhelming.

  34. NotQuiteSo says:

    The SEC’s funding nearly tripled from 2000-2008.


    There’s a reason the chart “SEC Fees Collected and Appropriated Funding, 1991-2001″ (Source:SEC) stops at 2001, and the reason is the budget grew enormously after Enron, from $377MM in 2000 to $906MM in 2008. It simply isn’t so that the SEC was starved for funds in the last 10 years.


    This fact takes the discussion back to your earlier point, questions about regulatory capture, focus, management, and other issues might explain the SEC’s failures, but it wasn’t budget. Recall that Arthur Levitt resisted Brooksley Born on derivative regulation, that the SEC’s Division of Enforcement and its Office of Compliance, Inspections and Examinations (OCIE) fumbled Madoff, and recall that at the same time the SEC gave ratings agencies the power to, in effect, print money with their AAA ratings (since AAA instruments could be applied to capital requirements, they stood in the same place as cash) it did nothing to supervise them. No budget can explain this kind of incompetence.

    More generally, as far as I can tell, whenever a regulatory or enforcement agency fails it always points to funding levels. Here is a vivid case; even with a budget that grew a compounded 12% a year from 2000-2008 – the entire period of the credit bubble inflation and collapse – the SEC was a colossal failure.

  35. alfred e says:

    Yeah, we are actually that rotten and corrupt.

    The SEC is a toothless anachronism, that wastes money. The fox is being paid to look the other way.

    You can increase the staffing all you want. Same result.

    Perhaps if you did indeed offer employees “bonus” cuts of fines and fees they could turn Wall Street ugly. But then, GS would just hire them away as market experts.

    Maybe that’s why GS and others pay so well. Don’t want no insiders going to the other SEC side.

  36. Alex says:

    And…since they cannot hope to pay their staff reasonably competitive salaries, they have turned into a farm team for the investment banking and accounting industry.

    So the game plan here is to put in a few years at the SEC, then go to work for one of the supervised, so you can tell your generous new employer how to really work that system to death.

    Nice, isn’t it?

  37. Mannwich says:

    Nice troll takedown, BR. It really is tiring though. These idiots are RELENTLESS.

  38. markd says:

    @dead hobo
    Thanks I’ve got an infection and the fever has made me lose touch with reality.

    In my defense tho, I did say if.

  39. Cynic_FA says:

    Another Nominee for SEC head on a Stake – Christopher Cox

    The following article titled Inside story of the breakdown at the SEC is worth a read


    A highlight of Time 2/26/2009 article

    “But Cox kept his distance from the investment banks. He says the SEC chairman “typically does not” jawbone CEOs of those firms. Other observers say Cox simply checked out. “They never heard from him. They never saw him,” says another ex-commissioner. “He was never a factor. Even when things got bad, it took a long time before he got on the phone to find out from these firms what their exposures were and what they were doing about it.”

    The article also mentioned that the top investment banks pleaded with the SEC to be the regulator of choice to avoid closer oversight by the EU.

    Cox retired and he joined the Boston-based international law firm of Bingham McCutchen LLP as a partner in the firm’s Corporate, M&A and Securities practice, resident in its Orange County, California office. This is proof that no bad political deed goes unrewarded.

    @mannwich…thanks for noticing.

  40. Mannwich says:

    @Cynic: Well, there you go. Those on the Right say we need MORE of Cox’ “hands-off” Wall Street behavior. It worked so well in the past. Bunch of f’ing tools. Would serve them right to lose their ass in the market then. Sorry, but I’m well past the point of losing my patience with this crap.

  41. Mannwich says:

    It’s all “nudge-nudge, wink-wink” from our “best & brightest”. As George Carlin opined, “it’s all one big club and you and I ain’t in it”.

  42. NotQuiteSo says:

    BR: The source for budget figures is:


    My mistake on the GAO report. I assumed you were quoting a more recent report. Timeframe is important here because SEC officials blur budget figures to argue for more.

    For example, last year Schapiro told Congress “The agency has suffered a significant decline in staffing levels, due to several years of flat or declining budgets. Between 2005 and 2007, the agency lost 10 percent of its employees, a decline that inevitably affected all of the SEC’s major programs.” (See http://www.sec.gov/news/testimony/2009/ts031109mls.htm) What she did not say was that in the five years before the period she cites, in other words from 2000 to 2004, the SEC’s budget more than doubled. (See http://www.sec.gov/foia/docs/budgetact.htm)

    The SEC is a failed agency, and in light of these numbers it’s difficult for me to believe it’s the budget. Its budget nearly tripled from 2000 to 2008 (as above), and that was the period of the tech bubble collapse, the inflation of the credit bubble and its collapse, Madoff, etc. etc. Reg capture, over-lawyered, or simply poorly managed and complacent might be better explanations. As the simplest example, budget doesn’t explain why one SEC official, when told Madoff might be a Ponzi scheme, launched an examination of Madoff but didn’t actually look for a Ponzi scheme.

    (Apologies if this appears as a duplicate post. It’s not clear to me the first one registered.)

  43. DC says:

    The jhunt/Mannwich incentive plan has merit. By all indications the days of “public service” for its own sake are gone. If Mr. Smith still goes to Washington it’s only because he’s already worth a fortune.

    But why stop at the SEC? Let Dept of Defense employees cash in on blowing the whistle on the unfathomable sums of money sloshing around that money pit. Same for USDA, FDA, FCC, you name it.

    Even the smallest federal agency has a giant revolving door. Private-sector salaries, both in the C-suites and on K Street, dwarf even top-tier Hill and Administration staff jobs, which max out somewhere south of $200,000 last I checked. That’s literally chump change by comparison, not just in NYC but also in DC where the cost of living has increased along with the size of government.

    There will always be bureaucrats who are happy with a cubicle and a comfy benefits package. But in the last few decades DC has become a type of graduate school that offers a credential whose earning potential can easily exceed a law degree or MBA. If more of the payout accrued to the direct benefit of the taxpayer it might make the system better.

  44. clipb says:

    one must remember that the sec is a governmental organization and thus is poorly managed in just about all categories: budget, supervision, regulatory, etc, etc, etc. all other federal shops are subject to the same poor management, lack of accountability, etc. see the fda and their staffing re food inspections as that sector exploded over the last decade. also, obviously, medicare/aid fraud, etc, etc, etc. oh yes, did i mention the fed, ots, occ?

  45. iratherbe says:

    Please … the old fox watching the hen house paradigm. We have someone as the most recent ex-Chairperson of an SRO, FINRA, who now is the head of the SEC, a federal regulatory body. Shapiro in & of herself & by proxy illustrates the problem, not the solution.

  46. “they only had to defund the SEC”

    that’s, exactly, it..

    People should remember that “Defund to Defund” is a, roundly applicable, act–designed to weaken the (any) targeted adversary.

    in other parlance, it = “Starve them Out.”

    clipb, above, also makes some fine points: “..one must remember that the sec is a governmental organization and thus is poorly managed in just about all categories: budget, supervision, regulatory, etc, etc, etc. all other federal shops are subject to the same poor management, lack of accountability, etc. see the fda and their staffing re food inspections as that sector exploded over the last decade. also, obviously, medicare/aid fraud, etc, etc, etc. oh yes, did i mention the fed, ots, occ?”

    the pristine sanctity of ‘Government Regulation’ is, largely, a ruse..

    We’d be far better off paying a whole lot less for the, little, effective Regulation that we do receive..

  47. [...] – they only had to defund the SEC – which is what effectively happened,” Barry Ritholtz writes. “Hence, the chief cop on the Wall Street beat was outgunned, overmatched, undermanned and [...]

  48. changja says:


    Your own numbers don’t make sense. You said: ”

    in other words from 2000 to 2004, the SEC’s budget more than doubled”, ” due to several years of flat or declining budgets. Between 2005 and 2007,” then “Its budget nearly tripled from 2000 to 2008 (as above), ”

    How do you go from double to declining and yet end up at 3x?

  49. FrancoisT says:

    Not only Congress does not want the SEC to inconvenience their biggest donors, but there is also the problems of how thoroughly the regulators are the bitches of Wall Street.


    Federal Reserve Chairman Ben Bernanke has said he does not want to lose the Fed’s authority over consumer protection; John Bowman, head of the Office of Thrift Supervision, does not support the proposed agency; and John Dugan, who leads the Office of the Comptroller of the Currency, has long resisted the idea of divorcing bank regulation from consumer protection.

    Yesterday, Dugan told a gathering of bankers at the ABA conference that if the two are separate, consumer protection would trump bank profitability, which he said is “backwards”.

    There you have it! Yet another tool looking for the plush job after a stint in government. Can someone in the White House PLEASE locate his/her spine and FIRE this REMF NOW?

    Since every other major democracy has a national consumer protection agency, here my question to Dughole the Bandit:

    Pray tell us ONE example of a national banking system that has seen their profitability eroded to the point of financial instability ANYWHERE in the western world by the diktats of a consumer protection agency?

  50. farmera1 says:

    Is the game over, now that corporations can give unlimited funds to politicians? Corporations have all the same rights as citizens. Now if I only had millions/billions to influence the government, I would be equal, but since I don’t, I guess that makes corporations more equal than I am. In fact I’m sure of it.

    Here’s an interesting read:


    Posner has seen the light, but it is probably too late.

    I also don’t believe it is entirely a matter of funding. When government regulations is effectively ran by people that don’t believe in regulations, that is just another way of starving the beast.

  51. Jack says:

    I see the header “Defective by Design” and I think the article’s going to be about cars. So I read the article and some of the comments about the real topic (not cars) leads me to believe that the US car people, after destroying that business, moved over to the finance business (whatever that is) and are proceeding to destroy that.

    New slogan?: SELL AMERICAN
    mannwich said it was a “cultural” thing about the finance industry. Maybe it’s all a “cultural thing.

  52. Mannwich says:

    @Jack: You got it. I think almost every dysfunctional thing that we see today can be attributed to our bankrupt culture. The rot starts at the top and the Sheeple merely follow what they see is acceptable behavior by their masters.

  53. yostuntman says:

    or perhaps you guys and the american people will come to understand human nature and the inherently inefficient nature of government: “A wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned. This is the sum of good government.” Thomas Jefferson

  54. wngoju says:

    Uh. Stuntman… Jefferson also said “I believe that banking institutions are more dangerous to our liberties than standing armies.” Jefferson would recognize GS. In 1800 most people were farmers. If magically some early GS had appeared in, say, 1808, I think Jefferson would have done anything he could have to eliminate it. Uh… Regulation!

    GS has injured me. I want the government to help protect me from having all my money taken away.

    But, members of the high church of Non-Government -believe-, and that is that.

  55. Dan B says:


    The post on the SEC and staffing levels today reminded me of the fight over SEC budgets for 1995. Congress has its fingerprints all over this.

    They bring people in and berate them under lights and in front of cameras. They cast their failings onto others.

  56. [...] tip Dan B, who adds: “The post on the SEC and staffing levels today reminded me of the fight over SEC budgets for 1995. Congress [...]

  57. [...] was taken. But flush with money from these potentially fraudulent institutions, politicians have systematically gutted the very people charged with investigating these [...]

  58. [...] all regulation is unwanted, corporations  should be unfettered, and that the SEC should be starved of funding and personnel. It is not an accident, but it reflects a goal achieved, desired [...]