The critics of the Securities Act finally advance a 'practical' argument. No one, they say, will be willing to act as a director of a corporation which needs funds if he has to assume the risks of being careful and competent, or having to share with other careless or incompetent sponsors of the corporation's appeal to the public the burden of making investors whole. American business will be directed completely by dummies. It is noteworthy that the Street's propagandists, when pushed to the wall, ultimately rely on this kind of 'practical' argument, which amounts to saying that:—
1. No matter how just or socially expedient the Act may be, bankers and corporation directors just will not take its 'risks.'
2. American financing cannot be done except upon their terms.
It should be frankly recognized that this raises the simple issue of whether it is possible for Congress to regulate the securities business at all. Can the law be made to serve the interests of a democratic community, or must it be written to conform to the wishes of the financially powerful? In short, must the law bow to a capital strike?
Saturday, 25 January 2014
Lobbyists arguments against financial regulation exposed
1934-style, in relation to the Securities Act. Some familiar arguments here.