Gambling With the Economy

Follow this link to the commentary in the New York Times by Roger Lowenstein.

Sort of playing devil’s advocate against his own thesis about standardizing derivatives trades, Lowenstein writes:

Wall Street might have legal grounds to fight this – after all, a derivative is a contract between private parties.

Can we think of any other contracts that are between private parties, but are illegal?

Gambling outside the banking industry, prostitution, selling recreational drugs, destruction of wetlands, building unsafe buildings, selling unsafe foods,  …

When a transaction is deemed to be harmful to society, we don’t seem to have any problem justifying its regulation.  That is of course, unless you are rich enough or can wield sufficient political power.

So the real question is, Can Wall Street wield enough bribery and political power to avoid having their harmful practices curtailed? Put this way, perhaps even Tea Party fans could understand the stakes.

Conservatives seem to think,  government can interfere with my sex life but they better keep their hands off my money. The liberals, on the other hand, seem to think sure, go ahead and put controls on my money, but leave my sex life alone.

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