Sunday, March 22, 2009

Obama's bold new rules for business

Free-market bloggers and radio talk-show hosts ought to have their rhetorical rifles loaded Monday morning after The New York Times moved a story launching the Obama administration's latest trial balloon: much expanded federal regulation of banks, hedge funds, insurance companies and even large companies like GM that can have a systemic effect on the nation's economy if they fail.

Increased oversight of executive pay and increased capital requirements for banks and hedge funds were the primary reforms cited in a version of the story by Stephen Laboton that I read in in The Denver Post.

The expansion of federal rules to companies beyond the reach of bailout money is the new and provocative concept unveiled in the story. Anyone who barks about the inviolability of free markets by government will be appalled.

Yet business is the provocateur here. Executives who ran companies like AIG took risks that threaten the economy on a large scale, and the government's desire to impose some limits on their behavior is a natural consequence. That's what a government is for: to protect the greater good from those who would selfishly abuse it.

I say have at it, Mr. Obama. Congress won't be your friend trying to pass legislation required to impose such limits. But that's no reason not to try.

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