I read the headline of this article, and expected to see a discussion on why Wall Street is indispensible. Instead I found a discussion on the election and specifically Romney. It's clear he's going to be the Republican nominee, so it's probably best to start cleaning up his somewhat tarnished image. I agree with much of the commentary. But there are a few comments and insights which should be shared.
First, the economy can function without Wall Street. You don't need a capital market in order to have a functioning economy. It's useful to have a capital market, it makes acquiring capital for progress much easier. In fact, stock corporations were originally performed to raise revenues for large projects which were determined to be 'outside the scope' of government responsibility. What most people are critical of is the very concept that Wall Street considers itself indispensible, and uses that as a lever to charge very large fees and pay outsized salaries. These are not required for a fully functioning economy. I'm not opposed to a person making, or earning, whatever he or she can. But even the corporate titans of the Gilded Age put some of their more public displays on hold during times of economic duress.
Second, as a Libertarian, I'm usually opposed to the government regulating anything. But I admit there are some instances where oversight and enforcement are required. The question is - what KIND of oversight and enforcement? Certainly not the kind we're seeing out of this administration:
Ross refers to the Dodd-Frank Act as "at best a very generalized blueprint" that addresses regulators' concerns, and he worries that the Consumer Financial Protection Bureau, which was established as part of Dodd-Frank, will have unforeseen consequences for Wall Street and Main Street.
"I think the regulatory uncertainty and the growing fear that this agency (CFPB) will be witch-hunting are definitely impeding bankers' willingness to make loans," he says.
Sarbanes-Oxley has done nothing to stop the fraud it was supposed to stop. It has added several weeks of work to the audit process in many companies, though. In other words, usually regulations result in nothing but increased costs of doing business.
Finally, I was amused to see Bain Capital misspelled as 'Bane' at one point. I would hate to say this is deliberate, but given my cynicism toward journalists today, I am likely to believe it was. Then again, spelling isn't a strong point with journalists these days. It's a rather unfortunate sign of the times.
