The Purpose of Regulation

The purpose of regulation is to keep rich people out of jail, ultimately to keep them alive.

Without regulation, you see, rich people are going to commit vicious crimes — massive frauds, negligence resulting in grievous bodily harm, even murder.

Sad but true. Without regulations, government regulations enforced at taxpayer expense or private regulations enforced at industry’s expense, bridges may collapse, mortgage fraud may be committed, bad food or drugs may be sold, and levees may break, killing many people. When people are killed, or terribly injured, or have their life savings stripped from them by nefarious means, well we have to put the people who did it in jail, just as if they used a knife or gun themselves.

Regulation is the only protection against these consequences, since they’re the only way to prevent these things from happening:

• If the drug you made for hypertension kills people, you killed people, just as if you shot them.
• If the mortgage security you created defrauds someone, you defrauded them, just as if you held them up at knife point.
• If the hedge fund you created lost everyone’s money, it’s your fault, just as if you conned them with a Nigerian 419 spam.
• If you ignored the warnings that the levees may break or the bridge may collapse, you committed murder, even if you’re the head of the government.

China gets this. They understand that if you do the crime, you have to pay the price. In this case we need to follow China’s example.   

This is a very important point that is not being discussed today. Because we don’t want to put rich people in jail. Not even for a few weeks. Certainly not for many years, certainly not a really nasty jail, where the guards may be unable to protect them from, let’s say, more blue collar criminals.

These would be terrible things to have happen, but sometimes they must happen, or everyone would do such crimes. Rich people have been telling us this about poor people for decades. They are right. 

It has been the hallmark of the Bush-era extensions to the Nixon
Thesis that rich people who are loyal to the regime are immune. On all
levels — regulatory, civil, criminal, globally. Rich people, really really rich people, should be able to dump their garbage in the Caymans and fly away free. They should be able to commit mass murder and then build $500 million libraries which will defend their reputations.

According to the Bush Thesis, which today’s media does not question,  rich people should be able to admit no fault, pay some of their
ill-gotten gains into some fund they manage and rake-off,
then be free to do it again.

This is the morality of our time. Because we have no
financial regulations to speak of, no safety regulations to speak of,
hardly any regulations at all to speak of, rich people have been able
to cross all legal and moral boundaries, have had their way with the
rest of us.

This is a shame for rich people, because there is nothing left for
them but the criminal law, nothing left but hard time in hard prisons.
Life sentences for many of them, and the forfeiture of all their
assets.

What is most disturbing, to me, is how Democrats who are leaning
against the Bush Thesis don’t yet grasp this . They don’t understand that our
lack of regulation has created a crying need for justice, real justice,
Texas justice you might say. Thus, Hillary Clinton proposes a billion-dollar bail-out of predatory lenders, a little support for their wealthier victims, and some post-signing adjustments to contracts.

Not good enough. We should have regulations, tough
regulations, which will go into effect as soon as possible. But in the
meanwhile, unfortunately, we need prosecutors who will go after these
rich people, who will hold them accountable for what they have done,
because there were no regulations to protect them from their worst
instincts.

In the next few years, as new regulations are being promulgated to
protect rich people from the worse devils of their nature, we need to
see some hedge fund managers, some mortgage brokers, and some very very
rich Wall Street types marched off to real jails, to face real hard
time and the loss of all their possessions. Fair prosecutions, fair
trials and fair sentences will be required to get this message across
to rich people. Just as we have to drug dealers and gangsters. That is what some rich people have become.

It’s the sacrifice they will make for their children and
grandchildren. Hopefully those children and grandchildren will learn
this lesson. Watch the lines, follow the regulations, protect the
regulations, and you won’t end up in misery like the men pictured here — from top Bernie Ebbers of Worldcom, Jeff Skilling of Enron, and Richard Scrushy of HealthSouth.

Once they were names. Now they’re numbers. Once they ran companies. Now they could use some company.

The Democrat who promises to give them the most company gets my vote for President.