Bernard Madoff making off with $50bn of other people's money; public sector pensions being overpaid; a 'stupendously incompetent' efficiency drive at the Department of Transport. A pattern is emerging here.
The point of having regulators is so that swindlers like Bernard Madoff get found out. As they say on Wall Street, when the tide goes out, you can see who's been swimming naked. But the point of regulation is that you shouldn't have to wait for the next recession to be confident that your money is safe. It turns out that the Securities and Exchange Commission hadn't actually examined Madoff's hedge fund since he registered it in September 2006; his audits were done by an obscure accounting firm in a tiny office; and frankly, the list goes on. Sure, it's fraud. But it's fraud that was allowed to happen because of a failure of regulation.
Meanwhile, the UK government says it's accidently been overpaying public sector pensions since the 1970s. But that's all right - no public sector workers will be asked to repay any of the money. That's in contrast to all the folk in the private sector who have yet to see compensation for pension fund collapses (brought about largely by Gordon Brown's tax and regulation of them); or the farmers who had to wait up to two years to get the farm payments they were promised; or all the families on tax credits who were asked for immediate repayment when the Revenue messed up and overpaid them. That's a failure of officialdom, and worse, it's civil servants protecting only their own.
Now we learn that an efficiency drive designed to save £57m has ended up costing taxpayers a net £81m. The scheme's computer system was not put out to tender, nor tested, and was unusable, and pretty much everything else was mismanaged too. That's a failure of government.
And this is just one day's news. All these people demanding more regulation and more government should be eating their hats. We don't want more regulation, lulling us into believing that things are properly policed when they are not. We don't want a more bloated civil service. We want smarter regulation and smarter government. Which probably means less of both.
