The Age of Reregulation

Readers of this blog know that I've been saying for a long time that we need a new era of reregulation, not just of financial markets which are desperately crying out for order, but in areas like consumer safety and worker protection. We've seen the consequences of a food safety system that's dated and what happens when lead-laden toys are allowed into the country. Today's Wall Street Journal article raises these issues in light of the fact that both Barney Frank, the House Financial Services Chairman, and Treasury Secretary Henry paulson are preparing ideas for how to better regulate the mortgage market. As the government readies to bail so many lenders and financial institutions--who would have thought a few months ago that the Fed would enable a JP Morgan Chase takeover of Bear Stearns?--we're seeing the consequences of lax regulation. No one wants to see industry and innovation constrained by the heavy hand of government and keeping markets as free as possible makes sense. So let the debate begin about the best way to go about this but, as I've been saying, let it begin.