“No Man’s life liberty or property is safe while the legislature is in session”.

- attributed to NY State Judge Gideon Tucker

Monday, May 17, 2010

Regulatory Zeal

I've been following two separate but equally important regulatory actions lately. Perhaps you have been, too.

The first involves Goldman Sachs. This weekend's Wall Street Journal carried a very extensive article detailing Mary Shapiro's rabid pursuit of the investment bank. Shapiro is portrayed as feeling the need to rescue the SEC's image and reputation from the stain of missing the Bernard Madoff fraud.

The other regulatory actions involve the Gulf coast oil spill from the rig hired by BP and partially operated by Haliburton.

In that case, while the regulatory agency is getting a black eye from possibly becoming too cozy with industry firms, our First Rookie and his henchman, Ken Salazar, have wasted no time letting voters know that they consider any and all companies involved to be untrustworthy and generally badly-intentioned entities.

While believing in capitalist economies, I also believe such economies need to be well- and effectively-regulated.

In the case of Goldman, if it can be proven, to the satisfaction of a jury or judge, to have clearly engaged in material fraud of customers, then it should be penalized appropriately.

Regarding the oil spill, recent news stories cast doubt on the management of the drill plugging process on the TransOcean rig leased to BP.

I'd be the first to insist that BP, Haliburton, or whoever the responsible managing firm which may be found to have been inept at handling the plugging be penalized.

But, surely, it would be better for everyone involved were the president to have waited until various investigations had discerned which entity or entities were culpable in the case of the oil spill, assuming it was not simply equipment failure and natural causes.

Then the president could have met privately, first, with that firm's CEO, and taken a more reasoned approach, ensuring the cooperation of the firm in making restitution and reforming their practices.

It does no good for our politicians to simply demonize private entities, especially in advance of due processes finding guilt.

Instead of calm, deliberative approaches to applying regulations to sectors in which business practices are found to be unacceptable, we have an administration which simply engages in thuggery and public accusations before the facts are known and available legal and regulatory processes have been allowed to operate.

This does our society no long term good.

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