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More on the appointment of Mary Jo as head of the SEC
Not saying good or bad, don't have enough background info on her. But keep in mind that lawyers, especially the best ones, are quite able to take either side of a situation and play it to the max, depending upon what they have been hired to do.
It will be hard enough to get any Obama nomination through Congress- if he had selected someone with a totally anti-Wall St. track record it would simply be an act of futility.
Remember the selection of Earl Warren for the Supreme Court... did that work out as expected?
Heaven forbid that someone with knowledge of the investment advisory business might be in position to lead the SEC! I found a copy of Business Week magazine, dated February 22, 2010 this morning. I purposely saved it because of the cover: a picture of President Obama and a quote from him "We are pro growth. We are fierce advocates for a thriving, dynamic free market." Whenever I see this, I just shake my head. The hundreds and hundreds of new regulations that have been put in place over the last four years (and in every administration for the last 20 years) have been often waived for the big Wall Street firms (or overlooked...wink, wink), but mostly shoved down the throats of RIAs who operate as fiduciaries, whether the rules fit the RIA industry or not. As we all know, all you have to do is follow the money trail. It's been this way in past administrations, and it surely is that way now. One thing I know is that when I retire, the one thing I will not miss is the hours I spend every week jumping through SEC hoops and trying to interpret rulings and laws that they don't even know how to interpret. And just when you sort of have a particular rule figured out, they either revise it, delete it, replace it, or add a new rule on top of it. For those folks on the outside, I can testify that the SEC does NOT have investors' interests as their top priority. And recent heads of the SEC are proof that lobbyists and the wire houses control the regulatory process. A thriving, dynamic free market? Are you kidding?
Reply to @BobC: "One thing I know is that when I retire, the one thing I will not miss is the hours I spend every week jumping through SEC hoops and trying to interpret rulings and laws that they don't even know how to interpret."
I'd have to imagine the thousands of pages of regulation and whatnot that you must have to deal with must drive you insane - and that the regulations are changing/new all the time.
OJ - I'm less inclined to cut some slack than you are. You are absolutely right, that a lawyer, even a mediocre one, can argue both sides of a case. That's just a skill, as might be engineering an automated device like a drone fighter or a Roomba. For most positions, a lawyer is just a hired gun, applying a skill where ever. Policy positions are different, which is why it is telling how one has chosen to hire oneself out.
(Defense attorneys' and prosecutors' ultimate "client" is the system itself; in their own ways they are working to ensure that the adversary system protects individuals from government power and abuse, and that the government not secure convictions at the expense of justice. I regard business lawyers as different - they are choosing their favored side. Are you for management or for labor? Are you for for the company executives or for the investors? Are you for the Dodgers or the Giants, Leo? - okay, that last may be the exception that proves the rule)
Warren is certainly an interesting case. A more recent example is Sheila Bair (formerly a Dole staffer, and appointed by George W Bush). Look below the surface, and you'll see that Bair always believed "in 'regulations that reinforce economic incentives'", e.g. supporting Sarbanes-Oxley. (NYTimes Magazine: Sheila Bair's Exit Interview What is below Ms. White's exterior?
Bob C - Industry insiders are not the only ones with expertise. That's the argument that's used for letting reps of companies like Enron and BP draw up our energy policy, and it's not a winning argument.
I'm one who hates to follow bullshit protocol and jump through hoops, too. Yet Big Business of ALL sorts have proven over and over to be unable or unwilling or too greedy to police themselves. And with my tongue in my cheek, I laugh to hear the term, "pro-growth" used these days by politicians. It's just code for "no regulations, let us fleece the public." You all watch "60 Minutes." I was watching some time ago. There was a particularly glaring case of fraud and abuse involving Notary Publics, somehow. (Maybe some buncha companies using Notaries to get officially registered in low-tax Texas? I forget...) But I DO recall clearly that the CBS staff applied for and received without delay from Texas authorities, a purple ink document-stamp. It's supposed to clearly show the NAME of the Notary. The name they used---to make their point--- was, "I.M. Fake." Then they brought it to the Texas Sec. of State or whichever official it was and asked him about it. His reply? "Well, here in Texas, we have a pro-business climate." YES! ....Which is just another instance. Another "brick in the wall." Are there such things as ETHICAL businesses? Everything is a matter of degree. None of us are as "pure as the wind-driven snow on a convent roof." But in case after case, I notice that when these greasy suits talk of being "pro-business," what they mean is that they are willing to be unethical. And so we need all these stupid regulations-----whether or not they serve their intended purpose. And THAT much is unfortunate.
Reply to @msf: I do not disagree with your point, but what I was attempting to say is that perhaps it is time to put someone in charge who is NOT an attorney, who has NO ties to banks and brokerage houses, and who has EXPERIENCE and UNDERSTANDS what fiduciary ethics are. Mary Shapiro is just the worst example of many, who for years were paid industry insiders, then she was expected to "forget" all of that and take the side of investors and fiduciaries as soon as she was sworn in as head of the SEC. It did not happen. Should anyone have been surprised? But rather than look at all the existing regulations and consider how they should be enforced, or if just maybe there are more than a few that are redundant or conflicting, get rid of some of them, our wonderful folks in Washington continue to create new ones. With more than 6,000 new proposed government regulations (for all industries) in three months from last August-October, we (ALL of us) are being killed with NEW rules and requirements. I have a friend who has said for years that Congress should only be in session for 5-6 months, period, and then elected officials should be required to go back home and get REAL jobs the rest of the year. That might REALLY change things for the better, so he says. Excuse me, but I have 3 more hours of compliance work to finish this afternoon!
Reply to @BobC: Thanks for the clarification. To a large extent, I agree with you as well. I too would like someone who wasn't in bed with those they're supposed to oversee.
Where we disagree are on the fine points. It isn't Congress creating regulations - Congress writes laws that government agencies have to enforce. The agencies are the ones writing all the regulations - Congress generally only mandates that they come up with some regulations to achieve specified objectives. Our last Congress was the least effective since the Civil War, so it seems they've already gone home - not to get jobs, however, but to raise money and campaign all year long.
Unlike the general public (and you, it seems), I'm not averse to lawyers writing regulations, any more than I am, say, averse to professional programmers writing applications. In each case, the best designed, best functioning system likely comes from a good professional. California has lots of propositions on its ballots, and it's usually pretty easy to tell the ones written by professionals from the ones written by amateurs, however well intentioned. One can see it in the thoroughness, in the concern for clarity, and yes, even simplicity. (I can hear you laughing now.)
None of this means that things aren't a royal mess, and when things get bad enough, a complete overhaul may be the best remedy. Good luck with your paperwork!
Goodness! Had no intention (and I know this may be hard to believe) of kicking the hornet's nest. Certainly stirred up a lively and very interesting exchange of thoughts, though. Thanks to all, and to Mark for starting the whole thing.
Comments
It will be hard enough to get any Obama nomination through Congress- if he had selected someone with a totally anti-Wall St. track record it would simply be an act of futility.
Remember the selection of Earl Warren for the Supreme Court... did that work out as expected?
I'd have to imagine the thousands of pages of regulation and whatnot that you must have to deal with must drive you insane - and that the regulations are changing/new all the time.
(Defense attorneys' and prosecutors' ultimate "client" is the system itself; in their own ways they are working to ensure that the adversary system protects individuals from government power and abuse, and that the government not secure convictions at the expense of justice. I regard business lawyers as different - they are choosing their favored side. Are you for management or for labor? Are you for for the company executives or for the investors? Are you for the Dodgers or the Giants, Leo? - okay, that last may be the exception that proves the rule)
Warren is certainly an interesting case. A more recent example is Sheila Bair (formerly a Dole staffer, and appointed by George W Bush). Look below the surface, and you'll see that Bair always believed "in 'regulations that reinforce economic incentives'", e.g. supporting Sarbanes-Oxley. (NYTimes Magazine: Sheila Bair's Exit Interview What is below Ms. White's exterior?
Bob C - Industry insiders are not the only ones with expertise. That's the argument that's used for letting reps of companies like Enron and BP draw up our energy policy, and it's not a winning argument.
Thanks for the clarification. To a large extent, I agree with you as well. I too would like someone who wasn't in bed with those they're supposed to oversee.
Where we disagree are on the fine points. It isn't Congress creating regulations - Congress writes laws that government agencies have to enforce. The agencies are the ones writing all the regulations - Congress generally only mandates that they come up with some regulations to achieve specified objectives. Our last Congress was the least effective since the Civil War, so it seems they've already gone home - not to get jobs, however, but to raise money and campaign all year long.
Unlike the general public (and you, it seems), I'm not averse to lawyers writing regulations, any more than I am, say, averse to professional programmers writing applications. In each case, the best designed, best functioning system likely comes from a good professional. California has lots of propositions on its ballots, and it's usually pretty easy to tell the ones written by professionals from the ones written by amateurs, however well intentioned. One can see it in the thoroughness, in the concern for clarity, and yes, even simplicity. (I can hear you laughing now.)
None of this means that things aren't a royal mess, and when things get bad enough, a complete overhaul may be the best remedy. Good luck with your paperwork!