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Sunday, January 17, 2010

Lax Oversight

Mr. Bernanke may be correct that lax oversight was responsible for the housing bubble (Lax Oversight Caused Bubble, Bernanke Says, New York Times, January 4, 2010: A1, A11).

But what caused the lax oversight? It was a lack of political will. The Clinton and Bush administrations were uninterested in regulation and did not ensure that the regulators did their jobs properly. As a result we have had economic collapse and the destruction of several asset classes.

Given the shilly-shallying going on in Congress with respect to developing a better regulatory regime and the presence of two former deregulators in high level economic positions in the Obama administration (Geithner and Summers), I despair that we will find the necessary political will any time soon.

Sent to New York Times

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