Under the headline: “Do hedge funds need regulation?” McClatchy newspaper writers (reporters seems a stretch) Kevin Hall and Robert Rankin go on a little bender.
U.S. economic history shows that regulators rarely move ahead of a crisis. They didn’t before the stock-market crash of 1929. They didn’t during the savings and loan meltdown in the 1980s. And they didn’t before Enron’s accounting scandal in 2001.
Only after the scandals exploded — and claimed many innocent victims — did the government move to stiffen regulation of market activity.
The accompanying photo online has this caption
STOCK MARKET CRASH
Stunned investors gather after Black Thursday, 1929. Many saw the crash coming, but regulators acted too late.
“Many people” saw the real estate bubble bursting five years ago. A decade ago,”many people” also thought we were entering a 25-year boom. Regulations on Fannie Mae and Freddie Mac holdings were tightened last year in response to scandals, but there are now calls for them to be more involved. The Wall Street Journal editorial page is suitably skeptical.
