The Regulator Down the Hall ... Fed and Comptroller of Currency Bolster the Ranks of Staffers 'Embedded' at Nation's Biggest Banks ... Memo to employees at big Wall Street banks and securities firms: Be careful what you say on the elevator. You might be surrounded by regulators. As part of a push to prevent another financial crisis, the Federal Reserve Bank of New York and the Office of the Comptroller of the Currency are increasing the number of examiners who go to work every day at the companies they regulate. Much like reporters assigned to a military unit during war, these regulatory "embeds" get unprecedented access to financial firms such as Bank of America Corp., Goldman Sachs Group Inc. and Morgan Stanley. – Wall Street Journal
Dominant Social Theme: Regulators always get it right.
Free-Market Analysis: Is there any justification for this? The dominant social theme "embedded" in the above article is clear: More efficient regulatory endeavors will reduce the kind of financial crises that have been prevalent throughout the history of modern capitalism. Only more and better government regulation is the answer.
Of course, the regulatory answer to big businesses excesses has not worked in the past and there is no reason why it will work in the future. Every regulation is actually a price fix that further distorts the marketplace and transfers wealth from producers to those who do not know how to produce. Nonetheless, this dominant social theme rolls on. Every time there is a financial setback, the US government and its adjunct enforcer the central bank (Federal Reserve) gains more power. This goes for the rest of the Western world, too.