Professor Elam

Barney Frank weighs in on the lack of regulation and what has happened in the economy. This is an excellent article and he is correct, it should frame the presidential debate this year.  He handily overlooks the lack of regulation in the Clinton era which led directly to the dot.com bust, not to mention ‘where was the SEC’ for Enron, Worldcom, Global Crossing et al.  He instead focuses on the current sub prime mess.  The more I look at sub prime, the more it is a replay of the S & L crisis of the late 1980s, lots of poor loans on poor ideas.

I am reading Alan Greenpan’s Age of Turbulence.  Alan certainly has led a charmed life, meeting professors in the 1950s that would lead to his work in Washington DC and New York.  Still he makes the point that the 1970s and particularly the wreck that was the Soviet Union and Eastern Bloc decimated the idea that a planned economy will outperform a market economy. Margaret Thatcher makes the point that the result of her work with Reagan was increased freedom round the world in her book Statecraft.  Greenspan points to the now expanding economies of Eastern Europe as an example.  Notably one of his mentors was a Russian immigrant and author Ayn Rand.   Now comes Barney Frank suggesting we need more not less regulation, as always citing evidence that some have gotten filthy stinkin rich off these schemes that broke a lot of other people.  There is considerable evidence that Corporate Boards are doing, finally, what they are supposed to do in the wake of Sarbanes Oxley. Lots of CEOs are getting booted but I am afraid it is more for not making a quarterly EPS than for not maintaining integrity of the company.  In their latest column in Business Week, Jack Welch and wife note how many corporations still have no meaningful vision or mission statement.  No wonder they do not know where they are trying to go. Barney is in my opinion going to be forever disappointed, the government hardly hires the best and brightest, rather we get just what Colleen Rowley described in the FBI.  Govt Bureaucrats are simply looking to avoid blame.  Is it any wonder clever executives, often thieves in $2,000 suits, can hire the best lawyers and cpas, Enron did just that, to cover their tracks and make excuses for bad behavior.

So, what say you?