Monday, May 3, 2010

govt in theory vs. practice

On paper, government regulation can be helpful to deal with market struggles-- whether out of equity or efficiency. In practice, one must worry about government struggles-- the gap between govt in theory and govt in reality. If government struggles exceed market struggles, then one is still better off with a struggling market.

Here's a fine example of one small aspect of this problem: WaPo's Daniel Wagner (hat tip: C-J) on SEC workers surfing for porn instead of regulating financial markets.

Senior staffers at the Securities and Exchange Commission spent hours surfing pornographic websites on government-issued computers while they were being paid to police the financial system...31 of those probes occurred in the 2 1/2 years since the financial system teetered and nearly crashed....violated government-wide ethics rules...

- A senior attorney at the SEC's Washington headquarters spent up to eight hours a day looking at and downloading pornography. When he ran out of hard drive space, he burned the files to CDs or DVDs, which he kept in boxes around his office...

- An accountant was blocked more than 16,000 times in a month from visiting websites classified as "Sex" or "Pornography"...still managed to amass a collection of "very graphic" material on his hard drive...received a 14-day suspension.

- Seventeen of the employees were "at a senior level," earning salaries of up to $222,418.

- The number of cases jumped from two in 2007 to 16 in 2008. The cracks in the financial system emerged in mid-2007 and spread into full-blown panic by the fall of 2008....


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