? in preventing problems in the financial sector, you might want to read the following passage from a new Money magazine interview with the Cato Institute?s Brink Lindsey:
What?s your take on the new financial regulations President Obama has proposed? Generally, the Obama approach is based on the predictable ? but mistaken ? premise that the crisis occurred because of insufficient regulation, so we need to give regulators new powers. But regulators, using existing authority, could have done something about the steady deterioration in mortgage underwriting standards, and they chose not to. They could have done something about the use of securitization to get around capital requirements, but they chose not to. The idea that the government ca predict these bubbles in their infancy is a fantasy. When bubble psychology takes over, it affects everyone ? and that includes the regulators.
