I've been reading several calls
for prosecution of fraud on Wall Street lately. No, these aren't coming from
the Occupy Wall Street crowd. Instead, top economic and business commentators
and scholars are noting the dearth of prosecution and the role this is playing
in our economic challenges. This is a fascinating debate and I only have time
to capture enough to spark your interest in hopes that you will check out some
of the sources I post.
For starters, I've been
interested for some time in the notion that many seem to ascribe to that if we
want a free market then we don't want regulation. This
post by Barry Ritholz (who
has been noted as one of the top 15 economic journalists) captures some
great thoughts by leading free market economists on the role of regulation and
prosecution of fraud. Here
are a few quotes:
There is a widespread myth that free market supporters
are against regulation or prosecuting fraud. In fact, Adam Smith - the father
of free market capitalism - was
for regulation of banks, and believed that trust is vital for a healthy economy.
enforcement of laws against fraud is a basic prerequisite for trust, Smith
would be disgusted by the lack of prosecution of Wall Street fraudsters today.
Smith railed against monopolies and their corrupting influence. And Smith
was pro-regulation, so long as the regulation benefited the little guy, as
opposed to the wealthiest:
In addition to Adam Smith, Ritholz also notes that more
contemporary free market economists are also for regulation and prosecution of
fraud as a means to keep the free market working properly. Incuding Richard
Posner, Alan Greenspan, Ludwig von Mises and even Friederich Hayek.
Read the article in its entirety on Mark and Aaron Zimbelman's
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