Giving Financial Regulators Their Due

In the current issue of The New Yorker, James Surowiecki makes a strong (and smart) argument for why we need regulation in the financial markets, pointing out that when markets are appropriately policed, investors feel safer and thus will throw their dollars more willingly into them. "The pharmaceutical industry, for instance," he writes, "would be much smaller if people were seriously worried that they might be poisoned every time they took a new drug."

More important, Surowiecki writes that financial regulation needs to be legitimized: "Reforming the system isn’t about writing a host of new rules; it’s about elevating the status of regulation and regulators."

That is, regulators need to be paid higher salaries, and their positions need to be more highly valued and respected, more along the lines of firefighters and soldiers as opposed to the security guards and rent-a-cops they're currently compared to.