Innovation in finance resulted in securitization. Securitization resulted in the Current Collapse. Present newspaper reports tell of how the Wall Street failures who brought us securitization are demanding that it, and they, be bailed out. They must have been successful, the Wall Streeters tell us and the newspapers dutifully report how much money was made on Wall Street because of securitization. Unfortunately, they spent all that money. The only people around to bail them out are the Federal Taxpayers. How is that innovation thing going?
Innovation in Insurance Regulation is one of the reasons put forward in favor of Federal regulation of Insurance. The States have regulated Insurance since the Eighteenth Century. State Insurance Regulators are concerned with consumer protection, with keeping complexity of Insurance to a much lower level than some Insurance Companies would like to market, and with stability. How is that stability thing going? See generally Jeff Segal and Dwight Cass, "Breakingviews.com/Insurance Dilemma" p. B2, col. 2 (New York Times Nat'l ed., "Business Day" Section, Tuesday, May 19, 2009); Dwight Cass, "Breakingviews.com/Insurer Oversight Is Not Yet Broken" p. B2, col. 1 (New York Times Nat'l ed., "Business Day" Section, Thursday, April 30, 2009).
A phenomenon of American life in 2009 is that people who fail are often treated as though they succeeded like they said they succeeded. That is sad, really. It can also be dangerous.
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