More on the Madoff Case
The New York Times yesterday reported that stock-fraud prosecutions have gone down the last several years, implying that the Bush administration’s lax attitude toward regulation of Wall Street let the Madoff scam go on for so long. Whether FBI and SEC fraud investigations are really down, I can’t say, but let’s accept that they are. This hardly makes the case for regulation. Why? Laws against fraud are not the same thing as regulation. Fraud is theft of property by deception. Thus a law against it is a law protecting property. In contrast, regulation is an imposition by government unrelated to any specific wrongdoing; it violates property. Repealing laws against fraud (or the refusal to investigate and prosecute it) is not deregulation. If it were, so would repeal of the law against armed robbery be deregulation. No one talks that way — for a good reason. There is a big difference between regulation and prohibitions on depriving people of their life and property. Anti-market people like to conflate the two categories to score points for the regulatory state.By the way, if the government were to vigorously investigate fraud, it might indict everyone who keeps Social Security going.Cross-posted at Free Association.
Comment by Jacob Steelman on 27 December 2008:
I am always skeptical of regulators who claim to be prosecuting fraud. How could we ever believe government employees who claim to prosecute fraud? They work for the world’s largest fraudulent organization – government. Yet they proclaim it is an organization doing good. During the 20th Century this organization around the world were responsible for the deaths of tens of millions of people in the Soviet Union, in Nazi Germany, in Fascist Italy, in Japan, in England, in France, in the United States, in Korea, in Vietnam,in Cambodia, Grenada, in Kuwait, in Yugoslavia – the list goes on and on and on. All the murdering done in the name of noble causes and wrapped in the term war which is suppose to excuse all this murdering. It is the same government organization which steals money from its citizens every day through taxation and inflation (through the printing of fiat currency and fractional reserve banking of the government sponsored central banking system). The world’s largest Ponzi scheme is that of social security. It is the same government organization which at the point of a gun transfers wealh from one group to another group of individuals having political power through various regulations and intervenes in the market place thus preempting millions of decisions of private market participants every day. Government is the world’s largest organized criminal organization.