Playing Regulation Catch-Up
Lawmakers atone for lax oversight.
Regulators are scrambling to correct the institutionalized wrongs that gave rise to the mortgage meltdown. The Wall Street Journal reports this is phase one of a growing trend toward greater regulation.
Safety scares involving toys, food and drugs have exposed quality control gaps in a variety of American industries. Democrats eager to take advantage of weaknesses in the Bush administration and Republicans eager to offer new leadership in November are proposing wide measures aimed at sanitizing sloppy business practices.
Even the aviation industry, weighed down by a sagging economy and oppressive fuel prices, has had its share of public safety problems. Last week Southwest Airlines (LUV) grounded over 40 jets after the world learned it missed mechanic inspections.
It's an election year. Expect politicians to peacock and posture in an effort to claim victory over corporate titans and their consumer contempt. The financial regulatory system will find itself in the crosshairs, as lawmakers are expected to propose broad change among the collective of agencies loosely organized under the Securities and Exchange Commission, or SEC.
Mostly silent throughout the current financial crisis, the SEC all but cemented its irrelevance when it publicly defended Bear Stearns (BSC) just days before its collapse.
Have Americans expecting oversight been given a false sense of security? Episodes of lead-laden toys, bad beef and predatory lending certainly call into question the performance of bureaucratic watchdogs.
Washington seems distracted by more pressing issues, like whether or not Major League Baseball players received injections in their posteriors, but at least it's looking out for someone's behind.
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