Since Finance is, at its roots, the “money now for more money later” business, it requires a predictable regulatory environment to function. Sovereign governments absolutely have the crucial role in providing sufficient stability for effective financial commerce in their jurisdictions.

That said, politics is infinitely more complex than finance. At least in the business world, there’s a score keeping system. Few governments are democracies, and even in those purporting to be, the vast bureaucracies that accumulate are alas accountable in no so simple way as a P&L.

So we see in the US that the the folks responsible for the social policy interventions in the GSE’s that led directly to the disaster are profiting politically from it, and are eagerly exploiting the mess to achieve even more of their redistributionist policy objectives.