Two Big Headlines in Search of a Common Message
The papers yesterday screamed the news as the two stories broke almost simultaneously. In one plot, the internal watchdog at the Securities and Exchange Commission found that SEC regulators had bungled numerous opportunities to catch Bernie Madoff as he engineered what became a $65 billion Ponzi scheme, leaving Madoff himself to wonder how in the world he was getting away with his web of lies.
The second storyline found Pfizer, the pharmaceutical giant, forced to pay a record-setting $2.3 billion to the government for the fraudulent marketing and promotion of four of its drugs.
Big stories both. But if the Pfizer saga revealed why for-profit corporations can’t be trusted to regulate themselves for the sake of consumer protection, then the Madoff narrative is a clear warning that government oversight alone is no panacea.
No system of oversight is perfect, of course. But as John Morton Blum, history professor emeritus at Yale University, has pointed out, Democratic leaders could start by installing regulators who believe in regulation.
“The people the Bush administration has put in the regulatory positions are wolves guarding the hens,” Blum said last year as the financial sector began to crash. “You’ve had a personnel problem as much as a legislative one.”
That’s a lesson Congress would do well to consider as it prepares to tackle health reform legislation that aims to weed out Medicare fraud, and climate change legislation that would require close new monitoring of the nation’s big polluters.