Over the years Chancellor Leo Strine, Jr., has thought long and hard about the proper functioning of the business world. In his writings off the bench in particular, he’s made it clear that he supports stronger government regulation. These excerpts show Strine’s thinking on the most recent financial crisis and the Enron scandal.
“Distilled down, what is most critical is that robust prudential regulation protecting society from risky corporate activity abated, precisely when corporations faced increasingly strong pressures to engage in much riskier endeavors in order to generate short-term results. In the financial sector, this potent cocktail was chased by several governmental interventions to rescue the industry when its ‘innovative’ activities threatened its health, a course of conduct that suggested that the financial industry could take risks other industries could not, because it had a de facto form of federal insurance.” —“Why Excessive Risk-Taking Is Not Unexpected,” The New York Times Dealbook, October 2009.
“Rawest of all [in the aftermath of the financial crisis], though, was the deal for millions of hardworking people who were paying their bills until the calamity destroyed economic growth and resulted in double-digit, persistent unemployment. They continue to suffer as do many others who have retained their jobs but endured furloughs, benefit cuts, and pay freezes, and seen their local taxes increase as services by budget-crunched governments diminish.” — From a March 2011 speech at The University of Western Ontario.
