Whistling Past the Regulatory Problem
Senator Carl Levin (D, MI) strode right past the fundamental problem while lambasting Goldman Sachs executives (emphasis added):
Wall Street is on the wrong side of this fight. It insists that reining in that — those excesses would unduly restrict the free market that is the engine of American progress.
But this — this market of ours isn’t free of self-dealing or conflict of interest. It isn’t free of gambling debts that taxpayers end up paying.
It isn’t free of those debts because — primarily by backing risky mortgages through Fannie Mae and Freddie Mac and increasing barriers to competition with regulatory bars to clear — the government has allowed too-big-to-fail bailouts to become an implicit part of the economy. Layering on regulations will only increase complexity and the potential for the manipulation of the financial industry, whether for financial or political purposes.