Today, Obama announced, in the editorial section of the WSJ, an effort to reduce red tape and modernize our regulatory system. Undoubtedly, Obama’s letter was prompted (1) Facebook’s decision to undertake a $1.5 billion private placement rather than pursue an initial public offering , combined with (2) Goldman Sachs’ decision to disallow any U.S. investors in the private placement. A huge statement to our government about where regulation has brought us.
It is no coincidence that the Great Recession and the Sarbannes Oxley Regulations were coincident. We didn’t need more laws and regulations to prevent the Enron and Worldcom frauds, we needed enforcement of the existing laws. Bernard Madoff was ‘outed’ long before his arrest. We now know, conclusively, that Washington chose not to listen, and the regulators chose not to investigate. And we could go on, and on.
The question is: Will we get less and more meaningful regulation? And how long will it take? It is possible: Canada revamped their system. We need to follow our northern neighbors as a sort of blueprint.