David Brooks on Dubious Regulation

At the EA's first Town Hall last night, I mentioned this article by NY Times columnist David Brooks. In it, Brooks questions both the need for more rigorous financial regulation and the ability to implement it.

I thought this quote was especially insightful:
"We don't even have a clear explanation about the past, yet we're also going to need regulators who understand the present and can diagnose the future."


Kevin Walton said...

I feel like the post-Lehman world will be one which the federal government will play a bigger role in regulating and managing. Although this may be good, so as to prevent another crisis like we are in now, there is also less room for the free market. My thoughts are mixed on how much control and regulation the government should have. I believe in laissez-faire markets, but yet maybe we have come to a point where we can never have them?

Michael Stork said...

I understand your mixed feelings about government intervention. Coventional wisdom seems to say that the crisis alone is evidence for more regulation. Brooks's argument is that we don't know what happened, so increasing regulation is a simple answer to an unknown problem. This choice between security and liberty was best phrased over 200 years ago:

"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety."
--Benjamin Franklin