Wednesday, April 21, 2010

Wall Street: A Standard of Conduct?


Perhaps we will have new financial regulation. Perhaps the weight of public opinion is being felt by the Republicans in the Senate. My Republican Senator from Ohio, George Voinovich, who will retire soon, should jump at the opportunity to do something meaningful before he steps down from his career of public service. He was the Governor of Ohio when I arrived in Columbus, Ohio in July, 1996 to begin my tenure at the Ohio Bureau of Workers' Compensation. He was the man-in-charge of Ohio when the OBWC funded some 86 investment managers in 1997-98 that included the politically well connected coin dealer Tom Noe. Unfortunately for all, the Coin Funds that were funded during the Voinovich and Taft administrations should never have been funded in the first place. But, here again we see that raising money for political campaigns can lead to rewarding those that raise the money with opportunities to destroy the trust people have in their government. While the remaining 85 investment managers behaved in a responsible manner, it took only one bad apple to spoil the opportunity for so many.

The idea that Wall Street can run without the necessary regulations, or the Securities & Exchange Commission (SEC) can operate with no teeth and luke warm enforcement, is pure crap. That's right. I said pure crap, and I mean it too. Even with a new set of regulations to govern the way business is done on Wall Street, the idea that the markets will regulate themselves is also pure crap. The idea that certain people are clients of Wall Street is also pure crap. When things get tough and survival becomes upper most in the minds of those that run the biggest banks, there are only marks at the table. Everyone is a mark because everyone is looking out for his own survival. As I have written many times, economics is easy, politics is hard, and enforcing a standard of conduct may be the hardest thing to do, but that is no reason why we should not attempt to do so.

Stay tuned.

4 comments:

Butch said...

Ahhhhh. I forgot about the coin issue. Kind of like what Wall Street did with poorly secured investments in real estate, only earlier and government sponsored.

LceeL said...

Standards of conduct? On Wall St.? The ONLY standard of conduct on Wall St. is governed by their desire to feed the 'bottom line' - either on behalf of the Shareholders - or themselves. It's MONEY, after all. It's ONLY BUSINESS, after all. Nothing personal.

Butch said...

I have to agree with the article I'm attaching....

There have been too many people goign through the revolving door of GS for them to be policed for their wrongful doings over the years. If, make that a 24 pt. font IF, they were so filthy rich then why did they need bailed out. They should be bailing everyone else out.

Cloudia said...

You obviously know what you are talking about....what I always knew in my bones....




"The conventional wisdom has little to do with the truth about Wall St."

Willaim Cohan