Investment, Speculation, and Regulation

Henry Paulson, the SecTreas, has proposed a new set of regulations for the financial markets. As expected, the response is all over the map, from “its just re-arranging the desks at the Treasury Department” to “an unwarranted interference with the free market.” Nothing new in all of that. Of course, the “interference” argument is somewhat strained, since the meltdown is occurring precisely in those parts of the market that were lightly regulated or not regulated at all. And even in areas where