“The Obama administration’s plan for a sweeping expansion of financial regulations could have unintended consequences that increase the very hazards that these changes are meant to prevent. Financial experts say the perception that the government will backstop certain losses will actually encourage some firms to take on even greater risks and grow perilously large. While some financial instruments will come under tighter control, others will remain only loosely regulated, creating what some experts say are new loopholes. Still others say the regulation could drive money into questionable investments, shadowy new markets and lightly regulated corners of the globe.” (Washington Post, Tuesday)
The law of unintended consequences can’t be repealed.
FEE Timely Classic
“Social Cooperation, Good Intentions, and Incentives” by Dwight R. Lee
