McCain would fire Cox - But, would it make a difference?

by Pat Huddleston |  Businessweek quotes John McCain as saying that if he were president he would fire U.S. Securities and Exchange Commission Chairman Christopher Cox for being asleep at the switch and allowing the failure of investment banks to surprise us all. 

Would the person McCain appoints to replace Cox do any better?  Laying aside the substantial issue of whether the SEC had the authority to oversee the conduct that led us into this mess, it is unlikely that any person John McCain would appoint would be a real advocate for investors.

The SEC is a remarkable agency; there is not a smaller agency with a bigger mission.  But it is constantly under pressure from big corporations and the securities industry to relax the regulations that are designed to protect investors.  This is where the Chairman comes in. There have been Chairmen whose first priority is making things easy for business, and there have been Chairmen whose first priority is protecting investors.  While they all like to say that they can balance the two, the truth is that those priorities compete for dominance.

In the wake of this latest disaster, we'll likely see tighter regulation.  But the ink won't be dry on the new regs before the securities industry and big business begin hammering away to 'relax' them.  Congressmen beholden to big business will pressure the agency. Having a Chairperson who can stand up to the powerful lobbies screaming for de-regulation will determine just how many baby boomers lose their life savings. 

For retirees and those about to retire, then, the question should be: “Which of the candidates is more likely to appoint a chairperson who can defend investors against the constant onslaught of de-regulators, enlarge the examination and enforcement staffs, and prepare for the impending retirement of the biggest generation of investors in our history?”  John McCain has proudly called himself a de-regulator and anyone he appoints is likely to come from that mold.

For more discussion, see Memeorandum here.

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