Perhaps it is being based in Washington. But it is depressing how many of those responsible for the operation of the capitalist system think the government could run it better than they do.
Today the Investment Company Institute – mouthpiece of the US mutual fund industry – urged Congress to give more money to the Securities and Exchange Commission (SEC) before it adjourns. In a letter to Congressional leaders and appropriators, the Institute said it is imperative that Congress provide the SEC with its full funding increase as soon as possible in order to “help restore investor confidence in our financial markets and benefit our economy as a whole …
A well-funded SEC will allow it to meet its enhanced obligations in the aftermath of recent accounting scandals and to continue to provide effective oversight of our financial markets.” Of course, there is self-interest at work here. The mutual fund managers that fund the ICI need money to flow back into equity funds. Perhaps they are even hoping that potential new competitors will be hobbled by SEC regulations.
But wouldn’t it have been better to hire fund managers capable of looking beneath the published accounts of Enron rather than rely on the SEC to tell them what it is safe to buy?