I view this kind of writing by an ex-vice president of Citibank as the work of an intelligent predator that realizes for the big cats to survive they have to keep the herd healthy.
Still, it is refreshing to hear a denizen of the Wall Street jungles echo what we've been saying:
...Public choice theory has identified the root causes of regulatory failure as the capture of regulators by the industry being regulated. Regulatory agencies begin to identify with the interests of the regulated rather than the public they are charged to protect. In a paper for the Federal Reserve's Jackson Hole Conference in 2008, economist Willem Buiter described "cognitive capture," by which regulators become incapable of thinking in terms other than that of the industry. On April 5 of this year, The Wall Street Journal chronicled the revolving door between industry and regulator in "Staffer One Day, Opponent the Next."
Congressional committees overseeing industries succumb to the allure of campaign contributions, the solicitations of industry lobbyists, and the siren song of experts whose livelihood is beholden to the industry. The interests of industry and government become intertwined and it is regulation that binds those interests together. Business succeeds by getting along with politicians and regulators. And vice-versa through the revolving door.
We call that system not the free-market, but crony capitalism. It owes more to Benito Mussolini than to Adam Smith...
But see, this is disinformation designed to evoke the empathy of the herd beast and not how this bank$ter really feels. What this big cat wants you can hear from the growls in his belly in the preceding paragraph:
...The idea that multiplying rules and statutes can protect consumers and investors is surely one of the great intellectual failures of the 20th century. Any static rule will be circumvented or manipulated to evade its application. Better than multiplying rules, financial accounting should be governed by the traditional principle that one has an affirmative duty to present the true condition fairly and accurately—not withstanding what any rule might otherwise allow. And financial institutions should have a duty of care to their customers. Lawyers tell me that would get us closer to the common law approach to fraud and bad dealing...
This is part of the chain of disinformation that led to that remarkable statement about that remarkable Benito. You could smell the carrion on the wind with the opening lie. Spot the pivot on which the worm turns:
...Classical liberals, whose modern counterparts are libertarians and small-government conservatives, believed that the state's duties should be limited (1) to provide for the national defense; (2) to protect persons and property against force and fraud; and (3) to provide public goods that markets cannot. That conception of government and its duties was articulated by the Declaration of Independence and embodied in the U.S. Constitution...
Peace, whose modern counterpart is war. Knowledge, whose modern counterpart is ignorance. Freedom, whose modern counterpart is slavery.
This is the mantra of the Wall Street liberal.