For the last month, the conversation on Wall St has revolved around the idea of regulation. Specifically, the lack of it and how/whether to address that fact. The purpose of this post is not to espouse a political doctrine, but rather to comment on a central Christian doctrine: The Law, regardless of its stripe – Hebrew or Greek, of God or of Man – does not have the power to engender what it commands. Read your newspaper these next couple weeks!! People are arguing that the problem lies with the type of rules that are enforced. But we know it runs deeper than that:

From the NYTimes:
“It’s a fair criticism of the Bush administration that regulators have relied on many voluntary regulatory programs,” said Roderick M. Hills, a Republican who was chairman of the S.E.C. under President Gerald R. Ford. “The problem with such voluntary programs is that, as we’ve seen throughout history, they often don’t work.”

We foolishly believed that the firms had a strong culture of self-preservation and responsibility and would have the discipline not to be excessively borrowing,” said Professor James D. Cox, an expert on securities law and accounting at Duke School of Law (and no relationship to Christopher Cox).”Letting the firms police themselves made sense to me because I didn’t think the S.E.C. had the staff and wherewithal to impose its own standards and I foolishly thought the market would impose its own self-discipline. We’ve all learned a terrible lesson,” he added.

A couple of the legal changes in the last couple weeks:
-A ban on short selling.
-Major overhaul on accounting standards.
-The government price-fixing the worst assets in our system.

Theologically, this is very interesting. The thought process behind the ban on short selling goes something like this: the stock market is failing because of the actions of a couple of scheming and evil people. If we can just eliminate those people who are manipulating the market and making everything difficult, then the market (or my company) would cease going down.

Regarding the accounting regulations, the thinking goes like this: if we don’t make companies acknowledge their sin then it is almost like it doesn’t exist…

As for the bailout, it’s too early to draw any conclusions.

There is a lot to talk about here, but the point is that regulation never works. Companies will fail regardless of short selling bans, price fixes, accounting changes or bail outs. New laws are not the answer. The need is for payment or forgiveness. But as we all know, if there is ultimately to be any forgiveness, someone will have to pay.