By you’ve probably heard of the scandal involving the SEC senior staff caught downloading hardcore pornography, sometimes during their entire eight hour day. This comes just about a week after the charges filed against Goldman Sachs, which makes this story seem oddly coincidental. Vox Day speculated earlier this week that the charges were actually the Obama administration’s way of telling them to lay low for while. This is an election year, you see, and the Democrats can’t have a powerful lobbying group like Goldman Sachs, who also received TARP money, connected to them. After all, at this point it’s about damage control.
I think these stories released, if we are to assume that Vox’s assessment is correct, are really Goldman Sachs’ response to the Obama administration. I think this is that organization telling them to back off and to let them run their dirty business themselves. In feudal times, this is the equivalent of the pope threatening excommunication to a young, upstart king who has thrown a bishop in his dungeon. What we are witnessing is a power struggle between a young communist and a zombie financial institution seeking to obtain power over the other.
But this whole episode highlights something else that I’d like to talk about. The Securities and Exchange Commission is charged with regulating various businesses and ensuring that no fraud is taking place. When Bernie Madoff was caught with his enormous Ponzi scheme, the SEC should have caught it early on. After all, that was their job and that’s what we the taxpayer expect of them.
The whole episode illustrates exactly why government is not the answer when it comes to protecting the consumer. The government lacks any real incentive to do it’s job in the first place. For every act passed by Congress, for every decision rendered by the Supreme and Inferior Courts, and for every executive decision mandated by the President, there has to be at least one person to enforce it. Leaders don’t get their hands dirty, they always have their hired hands do the job.
And with that person or persons, there always needs to be an incentive to do their job. In the private industry, this usually means things like higher salaries, better benefits, promotions, vacation time, etc. But in the government, most Federal employees have all that when they first get started. They hardly have to do anything whatsoever and their job is firmly secure. After all, when is the last time you heard of anyone within the Federal government being fired, unless they’ve screwed up way too much?
The truth is, there is no incentive to do your job when you work for the government, other than the love of your job. And if you work for the government, you probably don’t love your job a whole lot anyway. Indeed, I'm fairly certain that private sector workers have a much higher job satisfaction rating than Federal workers do. So really, when you reach a certain point in the government, you don’t care anymore and would rather do other things.
And thus, we find that any amount of government regulation is ultimately and utterly useless. It is a huge waste to even bother to attempt to regulate the economy because when it comes down to it, people would rather surf the web and look at pornography than do their jobs. People are not robots, nor are they morally upstanding citizens. People are selfish jerks who would enjoy doing the minimum amount of work for the maximum amount of profit. That is what drives human action and the free market system ensures that waste from such actions is minimized.