by Mitch Kokai
Senior Political Analyst, John Locke Foundation
The opening article of the latest Bloomberg Businessweek starts with the following pronouncement:
Thanks to Darcy Flynn, a longtime attorney at the Securities and Exchange Commission, we now have the ammunition to do what should have been done years ago: terminate the SEC, with extreme prejudice, and in its place construct a new regulatory watchdog for Wall Street that’s free of obvious conflicts of interest.
While I suspect many readers in this forum would have no problem following writer William D. Cohan’s prescription to “terminate” the SEC, no one familiar with the operations of the federal government ever should fall for the myth that a regulatory agency can be free of conflicts of interest.
As long as government decisions have concentrated benefits and dispersed costs, those who stand to gain from the regulatory agency’s decisions will exercise greater influence on those decisions. There’s no way to avoid conflicts of interest.
That’s not to mention the possibility of Baptist and bootlegger scenarios.