This is not much of a diary, and it's a few days old, but the information, while not surprising, deserves to be publicized more, especially as it comes from an unimpeachable source:
Riskiest lenders were most active lobbyists: IMF
Tue Dec 29, 2009 (Reuters) - U.S. lenders involved in risky mortgage lending that contributed to the 2007 financial crisis were also some of the fiercest financial lobbyists, according to a report by International Monetary Fund economists.
Lenders that lobby more intensively on these specific issues [against laws and regulations related to mortgage lending] have (i) more lax lending standards measured by loan-to-income ratio, (ii) greater tendency to securitize, and (iii) faster growing mortgage loan portfolios," the report said.
and
16 of the 20 lenders that spent the most on lobbying between 2000 and 2006 received financial bailouts from the government.
And this week-end we heard Ben Bernanke say that regulation is the solution to avoid bubbles:
Bernanke: Regulation key to avert crisis
Calling the recent financial crisis possibly the "worst in modern history," Federal Reserve Chairman Ben Bernanke said Sunday that tighter regulation and not interest rate hikes could have prevented the sharp downturn.
"Stronger regulation and supervision" of mortgage lenders "would have been a more effective and surgical approach to constraining the housing bubble than a general increase in interest rates," said Bernanke, according to an advance copy of his speech to the American Economic Association’s annual meeting in Atlanta.
Beyond the pathetic attempt by Bernanke to distract from the shamefully lax policies of the Fed in the past decade (policies which he had an instrumental role, behind Greenspan, in implementing), let me ask this: after a decade of regulatory capture, regulatory loopholes, and regulatory powerlessness, and after 1 year of a full scale - and largely successful - assaults on Congress by lobbyists from the banking and healthcare insurance industries, who can believe that "regulation" as understood by Bernanke and the other insiders at the helm in the past 2 decades and at the helm today is going to be anything other than a sad joke?
Regulation can work, if it's not turned into a travesty by permanent lobbying.
Which means that the first thing that needs to be regulated is the lobbying industry, and the general ability by regulated industries to buy their way to influence. One can dream.