Epic Failure by Government Bureaucrats

by

Some people look at the Madoff incident and wonder where blame appropriately lies.

Some say Madoff was too sneaky and had enough conspirators that no one could’ve stopped them.

Others say that the SEC could’ve and should’ve, and because of gross negligence, share the blame.

Still others say it was ultimately the investors that blindly handed their money over to such a fellow without doing a minimum of research.

In all cases, the answer to prevent another Madoff from happening is not more government bureaucrats. If a hundred bureaucrats are incompetent, what makes you think a thousand would do any better?

In fact, many investors are saying that the right solution is to get government out of the regulation of the financial sector altogether. Having the government investigate and expose fraud gives people a false sense of security. The SEC, after all, is made up of incompetent government bureaucrats.

Unfortunately, some people fail to see the fallacy of trusting a certain group of people because they are “the government”, and simultaneously distrusting another group of similarly dressed people because they are not. If history is any guide, it’s the government we should distrust, because when they fail, they don’t lose their jobs.

If there were some private company out there whose business was to investigate and expose fraud, then the trust of that company would be based solely on their historical performance. Such a group, having investigated Madoff and found his operation free from fraud, would rightly be completely defunct now, and the employees associated with the scandal could find themselves before a judge for committing perjury or gross negligence.

In the case of the failure of the SEC, we have no other SEC to turn to, and we have no way to shut down the failed SEC. Those people who worked for the SEC can simply claim incompetence and continue to deliver their incompetent services to the people of the United States.

When you hear people advocate “de-regulation”, what they are really saying is, “Let’s stop the charade here.” The sad reality is that government is no better, and often, significantly worse, at guarding your private interests. While they are capable of protecting your liberty, they are horrible at protecting your assets.

I’d rather trust my money in a marketplace where failure is rewarded with failure, and success rewarded with success, than a system where incompetence is the norm.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: