Fuel to the Fire II: Regulators, Politicians, and Lobbyists

Abstract

Since some outside the financial capitals aided-and-abetted in the grand buildup and collapse, it would be remiss of me not to make some mention of their role. In particular, it pays to understand the behaviors of various “power players,” which I take to include all manner of regulators (who, by my count, have missed every single major crisis of the past two decades and have, in fact, helped fuel a few of them), politicians and legislators (who in some cases emerge as rather clueless and hypocritical), and lobbyists (who talk up their particular special interests, regardless of whether the markets are good or bad). Let me illustrate how each one of these groups contributed to the crisis.