The Fed, FDIC, and Congress are wrangling ever more fervently about who should regulate what. Here's a question; why should the Fed, the FDIC, or any other alphabet soup agency regulate anything? Regulation is the problem, not the solution.
We all understand that human nature being what it is, we do need laws. We need laws that say simply and plainly, "thou shalt not lie, cheat, steal, kill, defraud (a form of lying), or in any other way compel another human being to do your will." Voluntary exchange must be the order of the day. It's moral; it works. No other form of human interaction is moral, nor does any other system of social interaction work.
Beyond rule of law --- and a system of justice to enforce that law --- why do we need regulators at all? In fact, history shows us over and over and over again that regulators fail and fail miserably. Witness the SEC and Bernie Madoff; witness the Fed and today's banking system with its massive failures.
Now, we are told by Congress and regulators like the Fed and FDIC that it is more regulation and ever more centralized regulation that we need. If that doesn't smell fishy to you, you just don't know a fish when you smell one.
No, we don't need regulators; we just need laws and law enforcement. We especially don't need financial regulators or regulations. We just need people not to lie, cheat, or steal. And when they do lie, cheat or steal, we need to put them so far behind bars that we have to shoot biscuits to them for breakfast in the morning.
We have no fewer than seven major acts of Congress that regulate the financial industry (Securities Act of 1933, Securities Exchange Act of 1934, Investment Company Act of 1940, Investment Advisers Act of 1940, Public Utilities Holding Company Act, Security Investors Protection Act of 1970, National Securities Market Improvement Act of 1996). On top of that, we have state Blue Sky Laws and a whole additional layer of financial regulators.
We have the SEC, FINRA, the Federal Reserve Board and the rest of the Fed, FDIC, the Comptroller of the Currency, 50 state regulatory authorities, and the Office of Thrift Supervision. We have bank examiners, both federal and state. And now, we are to have yet another regulator --- the Office of Financial Regulation proposed by BHO and his czars.
Will we the people never learn? Regulation and regulators fail. Laws and enforcement of laws to keep people from compelling each other works. Regulation and regulators actually make it easier for a small set of people to compel everyone else. I will argue that Bernie Madoff could not have swindled as he did without the SEC. Care to argue?
Who is ready to argue that regulation and regulators have preserved us, saved us, or helped us in any way? The evidence is all to the contrary.