What do you mean foxes can't guard the henhouse?

The inmates can't run the asylum? ... Corporations can't self-regulate?

I'm shocked, shocked, I tell you!!

In opening statements, Rep. Henry Waxman, D-Calif., committee chairman, said the current economic crisis could have been prevented "if regulators had paid more attention and intervened with responsible legislation. The list of regulatory mistakes and misjudgments is long and the cost to taxpayers and the economy is staggering."

Waxman put Greenspan on the spot, asking if he made any mistakes during his tenure as Federal Reserve chairman that may have contributed to the mortgage crisis.

Greenspan said he made a mistake in presuming that lenders themselves were more capable than regulators of protecting their finances. He said he was "shocked" when that system "broke down."

"I still do not understand exactly how it happened," said Greenspan.

Well... you see, Mr. Greenspan, it's like this.... human nature by default is self-obsessed and greedy. We must assume that those who know they won't be caught will do things that benefit themselves, ignoring the cost to others. We need checks and balances built into the system. When you take those away, you see the wreckage before you as an illustration of the end result.

Will this lesson take? Nah, I give it ....oh... another twenty years or so before we hear the pleading for deregulation again... long enough for the next generation of neocons to spawn and for voters to forget.

crossposted at American Street