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Bernanke gives clues to the future

March 17, 2009
The Daily Mining Gazette

Once again, government officials who didn't do their jobs are insisting that the answer to all our problems is in creating new federal regulations. Of course, that would mean hiring new regulators to enforce them, bumping those already employed up the ladder to better, more highly paid positions.

During a speech last week, Federal Reserve Chairman Ben Bernanke insisted that new rules are needed to prevent collapses such as that which have plagued the economy during the past several months. "We must have a strategy that regulates the financial system as a whole ... not just its individual components," Bernanke warned.

Expect other bureaucrats to join Bernanke in regard to the individual components they oversee. History demonstrates that their strong reaction to any failure is to blame it on an imagined lack of regulatory red tape.

Never mind that it was precisely because some financial institutions tried to comply with existing rules - such as the Community Reinvestment Act - that they had to go to Washington for bailouts.

Never mind that in terms of outright fraud, existing rules - had they been enforced - would have been enough to have stopped con artists such as Bernard Madoff.

Never mind, too, that Bernanke's demand to regulate "the financial system as a whole" has a distinctly socialistic sound to it.

Americans can hope that Congress will ask questions before throwing new regulations into the pool of bad ones. Unfortunately, given the current climate on Capitol Hill, that may be a forlorn hope.



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