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11/18/2009

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Dianne Foster

As Galbraith says, "Who will regulate the regulators?" Some measures have been more effective than others at curbing excesses in banking behavior, for example, the creation of the FDIC has proved useful for calming panics, but does it encourage recklessness on the part of bankers?

Unfortunately, some politicians think the solution to everything is no regulation while others think regulation, regulation, regulation.

Even with laws on the books, often the problem is money. The executive branch cannot orchestrate regulatory work if the legislative (which holds the purse strings) does not approprate the funds. The failures of the FDA in the recent past were perhaps caused by lack of funding...which is a two-edged sword. If Congress does not appropriate funds, then they are not at risk of being spent whether or not the chief executive wants to spend them.

There are many laws on the books completely ignored by both the executive and legistlative branches of the federal government.

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