Surowiecki: Wall Street Excess Due to Regulatory Failure
“We need an attitudinal shift on the part of regulators, who need to recognize that their gentleman’s-club ethos is ill-suited to today’s financial world, and who need to be aggressive not just in punishing malfeasance but in preventing it from happening.”
–James Surowiecki, “Bankers Gone Wild“; The New Yorker (7/30/2012)
Twenty years ago, I might have agreed with Surowiecki.
Today, his prescription for combating Wall Street excess comes across as naive and willfully oblivious.
That’s because rank-and-file regulators get paid a pittance relative to their Wall Street brethren, their future employers in many cases; regulators’ budgets have been whacked thanks to the lobbying efforts of you-know-who; and the senior leaders of would-be watchdogs like the Securities and Exchange Commission are now drawn from the ranks of Wall Street investment banks and law firms — and return to same.
Oh — and legislation aimed at curbing Wall Street (Dodd-Frank, anyone?) is essentially drafted and implemented by Wall Street.
Make that, watered down and not implemented.
Care to try again, Mr. Surowiecki??