"Cowboy Capitalism" Argument is Hogwash

The WSJ makes a very clear argument that debunks that Obama/Democrat idea that "cowboy capitalism" was responsible for this financial crisis. Let's forget the fact that Fannie Mae and Freddie Mac, two congressional entities overseen closely be Democrats, were at the heart of the matter. Sarbanes-Oxley and Elliott Spitzer were two of the most prominent regulatory disasters that were simply extra burdens that fly in the face of "lack of regulation."

In the second debate, Mr. Obama offered a similarly vague diagnosis: "I believe this is a final verdict on the failed economic policies of the last eight years . . . that essentially said that we should strip away regulations, consumer protections, let the market run wild, and prosperity would rain down on all of us."

Could Mr. Obama really believe that the era of Sarbanes-Oxley was about letting "the market run wild"?

. . . Some lawmakers called it the most sweeping securities legislation since the 1930s." The Times added that "business and accounting industry lobbyists had tried in recent days to soften the measure, but they got nowhere."

Wayne Crews of the Competitive Enterprise Institute tracks regulation across the entire federal government. He reports that the Bush administration set an all-time record in 2004, when it published more than 75,000 pages of proposed and enacted rules in the Federal Register.

Leftists might assume that many of these rules were actually watering down earlier standards -- but where's the evidence of declining compliance costs? Lafayette College economist Mark Crain estimates more than $1.1 trillion in federal regulatory costs for 2004, up an inflation-adjusted 16% from 2000. Overall agency enforcement budgets have increased each year since 2004.

Looking at regulatory spending in percentage terms, Mr. Bush's staggering 2003 increase of more than 24% was the largest in the last 50 years. If Mr. Obama considers this a record of deregulation -- and if current polls hold -- America's economy could be in for a very long four years.