Is there any problem that can’t be legislated out of existence? Nope:
Putting money into people’s pockets and into institutions is politically easy and economically sensible. But, if we don’t reinvigorate regulation as well, the credit system will remain sick, banks won’t fully recover, and investors and borrowers will keep on believing–correctly–that they’ve been hoodwinked and fleeced. Only a thorough repair of the agencies that handle securities and banking regulation–a repair FDR’s model can help us achieve–can prevent new crises down the road. Without this reform, other shady financial practices will emerge, just as they’ve done throughout history, and the money poured into stimulus will have been wasted.
That’s Thomas K. McCraw in (surprise!) The New Republic, where they’ve apparently forgotten that banking and finance remain two of the most heavily-regulated industries in the country. And the good folks at TNR have apparently never learned that, when people aren’t doing things (like lending money) it doesn’t exactly help motivate them when you pass laws to… stop them from doing things.