Transcripts

"Commentary"-The Rise of Regulation In The Financial World

SUZANNE PRATT: Tonight's commentator thinks the current financial crisis will bring about a host of new regulations. He's Allan Sloan, senior editor at large at "Fortune."

ALLAN SLOAN, SR. EDITOR AT LARGE, FORTUNE MAGAZINE: Until the middle of last year, capitalism seemed to be the wave of the future. There was a worldwide economic boom. Markets would take care of everyone. Forget regulation. All government had to do was get out of the way. It was a social compact. You were on your own, but the markets would provide. You didn't need a corporate pension. Instead, you'd save for your own retirement. In October of last year, U.S. stocks hit their all-time high. But we all know what's happened since. Markets have crashed, drops in U.S. house and stock prices have wiped out about $13 trillion. People who invested for decades have seen a huge piece of their lifetime savings evaporate in 14 months. The compact's broken. Now, of course, the government is busy doing what it always does -- bailing out the big fish like Citi and bondholders of Fannie Mae and Freddie Mac. If you're a little fish though, you're on your own, because you're not too big to be allowed to fail. People are angry about how capitalism is working these days and with the government putting trillions of public dollars into the financial market, we're about to switch from having very little regulation to having a lot. For the 40 years I've been writing about business, I've seen several swings from too little regulation to too much back to too little. This time, I hope we get it right. That's probably a fantasy, but even us skeptics are sometimes optimists at heart. I'm Allan Sloan.