President Clinton is now complaining about what he sees as a lack of activity by the Securities and Exchange Commission. Interviewed for an article in the New York Times magazine coming out this weekend, Mr. Clinton refers to the Bush administration as "eight years where we would not have an S.E.C. for most of the time."
It wasn't for lack of trying by the SEC. As this New York Sun article points out, the SEC tried to broaden its reach by regulating hedge funds and imposing new rules on mutual funds, but in each case was rejected by federal courts. In other instances, as this Sun editorial reported, the SEC went after hedge funds with expansive and burdensome document requests as part of what seemed to be fishing expeditions.
It's not clear that such activity does much to help the economy. In some case, it may hurt businesses and individuals: witness the news that Arthur Samberg is closing his successful Pequot Capital hedge fund operation because of an SEC investigation into something that happened in 2001, eight years ago. The investigation has resulted in no formal charges but has featured plenty of leaks to the press.
What is active, arbitrary government regulation good for? Helping politicians to extract campaign contributions from the individuals subject to regulation. In August of 2007, Mr. Samberg gave $28,500 to the Democratic Senatorial Campaign Committee headed by Senator Schumer, campaign finance records show. Mr. Schumer is a member of the Senate Finance and Judiciary Committees that were probing the SEC's handling of the Pequot investigation. Funny how the New York Times, which has been all over the Samberg-SEC story, has missed the Schumer-Samberg angle. It's certainly possible that Mr. Samberg wanted to help the Democratic Senatorial Campaign Committee for some reason entirely unrelated to the SEC investigation.