Rational Speculation

Am I the only financial blogger out there who thinks that President Bush’s financial regulation overhaul plan is insane?

Keep in mind that, only about six months or so ago, the President and his yes-men were saying that the economy was in excellent shape and that we shouldn’t be concerned. Now, in just six months time, they’re saying that they need to overhaul the whole financial system in order to oversee financial market stability. That’s quite a dramatic swing, wouldn’t you say?

It’s too late now, but IMO, the best thing the government could have done during this crisis would have been to take a laissez faire approach and let the markets work out things for themselves. Now they’re looking to cause more problems, and cost taxpayers more money, instead of just letting the pieces fall where they may. This whole mess has got me thinking that maybe even Nouriel Roubini may not be so overly-bearish is his economic outlook.

Being the skeptic that I am, I’m leaning towards the idea that Monday’s announcement of the financial overhaul plan is just a wag-the-dog political ploy created to appease the scared and irate masses, and to help keep Republicans in office this election year. But, I could be wrong.. this may only be an insane idea.

My prediction? This plan never materializes.