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It never ceases to amaze me. Maybe I—and you—should get used to it. But, you have to love the gall of the corporate world—nothing is ever enough. To wit: The Committee on Capital Markets Regulation has recommended regulations be changed to make it harder for the government to indict law-breaking companies or for private lawyers to sue on behalf of injured shareholders or employees. Yes, friends, in the Orwellian corporate spin world, Enron never happened.

One of the he first point that leaps out from the sleep-inducing 152-page interim report is a recommendation that regulations be "focused explicitly on the costs and benefits of regulation." You don’t have to be a policy wonk to remember that cost-benefit analysis was the primary weapon used by corporations, particularly during the Reagan Administration, to push for the trashing some of our most important environmental and workplace safety-and-health laws.

      It put a value on a human life—for example, if "only" 1,000 people might die from a carcinogen contained in a chemical sprayed into the air or from asbestos floating through their workplace, well, that was just a cost we had to bear for the "benefit" of the wonderful economic system we enjoy. You could make a plausible argument, indeed, that the threat of global warming is partly due to cost-benefit analysis which helped undercut emissions controls and particularly fuel efficiency standards for cars.

The same cost-benefit theory, apparently, is now being recommended for regulations governing conduct in capital markets. No matter the social importance of barring corruption (which destroys workers lives, for example, when an Enron-like collapse vaporizes thousands of jobs). Or the obvious outcome of a much freer hand for capital markets to do as they wish, increasing the risk of monumental and destabilizing financial collapses (can anyone say "hedge funds?").

The second point is the ideological rant justifying the loosening of such regulations: "The competitiveness of the U.S. economy depends on the strength of the public markets. Moreover, the strength of these capital markets plays an important role in the global economic leadership of the United States." Looking at the ideological make-up of this committee, I’m not shocked that this would be its mantra: chaired by Glenn Hubbard, former Bush Administration Council of Economic Advisors chair and John Thornton, who was president of Goldman Sachs and now is chair of the inside-the-Beltway Brookings Institution, the committee is stocked with investment bankers and free-market ideologues—and not a single citizens’ representative.

"Competitiveness" has been the catch-all phrase that is almost synonymous with "patriotism." It’s hard to find a political leader, now or in the past, who would say, whoa, wait a second, what is the cost of the "competitiveness" and who benefits? Competitiveness, for example, gave us the great de-regulation pushes in the savings-and-loan and airline industries. Didn’t you just love those? And, globally, competitiveness comes up every time you hear one of those captains of industry and their media sycophants pimp for so-called "free trade" agreements.

Indeed, there is a presumption here about our country’s "global economic leadership"—that it is all good. Well, certainly, as a large economic power, we need to play a role in the world. But, as elections throughout South America have shown, where leaders have been chosen in Bolivia, Ecuador, and Venezuela partly as a rejection by millions of people of our model of global economic leadership, we should be exercising our leadership in a way that isn’t just about enriching the elite but figuring out to share resources on an over-populated, resource-challenged planet.

Originally posted to Tasini on Fri Dec 01, 2006 at 08:24 AM PST.

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Comment Preferences

    •  The asset fund of college loan companies (5+ / 0-)

      I am afraid to name them outright because of liability but you know who they are.

      The entire college loan industry both the companies that lend and their wall street funds who hae the loans as assets should be the next.
      And don't forget the online university and career school scams.

      They will begin to crash at their own weight and then it will all come tumbling down.

    •  Derivatives... (2+ / 0-)
      Recommended by:
      alizard, trashablanca

      The derivatives market has a notional value in the neighborhood of $370 trillion -- yes, trillion with a "t" -- and is a largely unregulated over-the-counter market.  Remember the bankruptcy of Orange County, California?  That was due to a mishap in the derivatives market.  

      The US dollar is a slow motion train wreck.  A few substantial failures in these markets could easily bring on an economic tsunami that will affect us all.

  •  "costs and benefits of regulation" (6+ / 0-)

    What next? "Costs and benefits of prosecuting murderers"? Bank robbers? Rapists? Law for sale. Sheesh.  

  •  NPR segment on this (4+ / 0-)

    subject was good.

    It's a short piece that gives an overview of what this lengthy document is a why is was produced.  Basically, the finance industry is pushing back against Sarbanes/Oxley and thinks that the US is loosing market share because of too many lawsuits and too much regulation rather than because the foreign markets are maturing.

    The committee doesn't necessarily want to change the law (much harder to do now that Congress will be controlled by the Dems), but rather, they want to change the way the law is enforced.  It's counterproductive to go after corporate crooks don't ya know.  According to NPR's report, the SEC is already implementing changes recommended by the committee.

    •  Can this be changed when the Dems take Congress (1+ / 0-)
      Recommended by:

      in January?  The SEC's implementation of these assholes recommendations?  Or is this solely under the control of the Bush administration for now?

      "Unless someone like you cares a whole awful lot, nothing is going to get better, it's not." -The Lorax, by Dr. Suess

      by docangel on Fri Dec 01, 2006 at 08:31:36 PM PST

      [ Parent ]

  •  Cost/benefit (5+ / 0-)

    We get the cost, they get the benefit.™

    "Question authority and the authorities will question you." Now more than ever!
    You're a Republican? Oh, that's soooo 11/6!

    by armadillo on Fri Dec 01, 2006 at 10:57:28 AM PST

  •  Thanks for this diary. This is the kind of stuff (2+ / 0-)
    Recommended by:
    trashablanca, goodasgold

    that I need to know is continuing to go on, but that I don't always hear about.  

    "Unless someone like you cares a whole awful lot, nothing is going to get better, it's not." -The Lorax, by Dr. Suess

    by docangel on Fri Dec 01, 2006 at 08:32:29 PM PST

  •  Thanks (5+ / 0-)

    DailyKos diarists should forget about 2008 and focus upon present problems.  Vast problems.  I live in Houston, and many people's lives were ruined by Enron - Ken Lay's expedient death left an immense fortune to his extremely fortunate wife.

  •  Just curious . . . (2+ / 0-)
    Recommended by:
    trashablanca, phonegery

    Who are The Committee on Capital Markets Regulation? Is this a US Government organization? Private group? Whom does their recommendation influence?

    I don't think cost-benefit analysis in itself is evil. If you own a business (or a house, or a car, or anything) you want to know how much return (benefit) you'll get on anything you invest (cost). If you invest $1,000 and get back $5,000, great; If you invest $1,000 and get back $20, not so great. The problem is that in a macroeconomic environment there are many more factors and players and, possibly, victims. So while it may make sense for a business, from a strict cost-benefit point of view, to get rid of pollutants via a smokestack, anyone downwind receives negative benefits. That's one reason, Conservatives and Libertarians, we need government: to protect the rights of people downwind.

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