Comments on: Ethics laws can’t work http://blogs.reuters.com/felix-salmon/2009/10/22/ethics-laws-cant-work/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: rd http://blogs.reuters.com/felix-salmon/2009/10/22/ethics-laws-cant-work/comment-page-1/#comment-8245 Fri, 23 Oct 2009 15:54:04 +0000 http://blogs.reuters.com/felix-salmon/2009/10/22/ethics-laws-cant-work/#comment-8245 The problem is that everybody is focused on creating laws and ethics policies. Once those are in place, everybody then focuses on finding the tiny loopholes so that the behaviour that is clearly intended to be thwarted, is announced as passing the legal and policy requirements.

Paulson setting up a “social hour” with his old cronies without setting out clear ground rules that no government policy would be discussed means that he really did not udnerstand the concept of conflict of interest in the first place. With the recent Galleon and other affairs, it is clear that things that Main Street America view as way over the line are either viewed as acceptable or marginally unacceptable on Wall Street and in Washington.

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By: dollared http://blogs.reuters.com/felix-salmon/2009/10/22/ethics-laws-cant-work/comment-page-1/#comment-8238 Fri, 23 Oct 2009 05:24:55 +0000 http://blogs.reuters.com/felix-salmon/2009/10/22/ethics-laws-cant-work/#comment-8238 Actually, this raises the most fundamental problem: can you have a functioning democracy with the inequality in income that currently exists?

In 1970, an SEC enforcement attorney could live in Manhattan and afford to take vacations with his buddies from Princeton. His salary was 60% of the salary of his friends in the private sector, but real estate was cheap, and he had a great set of benefits.

Today, that pay differential is more like 300% at age 40, and that smaller salary cannot pay for anything in Manhattan, and puts even paying for a private university education for the kids at risk.

And the businesses being regulated are far more complex. So how does the SEC keep and maintain the talent to regulate the industry? It can’t.

And the motivation of the SEC attorney? Well, it’s to find friends in the industry to get the next job – the one that will pay for retirement. So bottom line, ethical behavior is against the fundamental interests of the SEC attorney.

We are all Colombia now.

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By: J. Daniel Wright http://blogs.reuters.com/felix-salmon/2009/10/22/ethics-laws-cant-work/comment-page-1/#comment-8215 Thu, 22 Oct 2009 17:22:20 +0000 http://blogs.reuters.com/felix-salmon/2009/10/22/ethics-laws-cant-work/#comment-8215 Felix:
Your post bristles with populist fury at the Treasury. I’m a longtime reader and I know that you have had spurts of “pile-on regulation” rage, but this post doesn’t read as well crafted as your others.
For instance, you mention that the UK has an elected finance minister suggesting that this is what you wish. But then you don’t tackle the likely questions that arise from that. Off the top of my head: how is America to decide what experience is necessary for the job? Either a professional academic like we have at the Fed or a practical banker like we have at the Treasury. I think we still end up with the same result whereby the Treasury officials come from the private banking sector.
J. Daniel Wright
demandequilibrium.blogspot.com

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