No Licenses to Kill
NEW YORK – In the last year, we endured a remarkable experience; after the bankruptcy of Lehman Brothers in September 2008, financial markets actually collapsed and required artificial life support. Nothing like this had happened since the Great Depression of the 1930’s.
What made this collapse so remarkable is that it was not caused by some external factor, but originated within the financial system itself and spread from there throughout the global economy. This was almost completely unexpected, as the prevailing view was that financial markets are self-correcting.
We now know that they are not. But, having gone too far in deregulating markets, we must resist a natural tendency to overcompensate. While markets are imperfect, regulators are not only human but bureaucratic and subject to political influence. Therefore, new regulations should be kept to a minimum.