The faulty premise in liberal/socialist thinking is that with enough regulations a "system" can be created that is so perfect that it will fix the flaws in human nature and eliminate greed, corruption and crime. It has never happened and you would think it is obvious that it never will. Worst of all, it assumes that government will be free of corruption.
Capitalism, as envisioned by Adam Smith, is intended to use human nature as the primary controlling influence. Vendors want profits, buyers want bargains, competition rules. Unfortunately, the prospect of ultimate failure isn't sufficient to prevent unscrupulous operators from causing great harm.
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Why aren't more people furious about the Libor scandal?
That's a question mostly being asked on the political left these days, and they're right to ask it.
Here are the basics: Barclays is the second-largest bank in Britain and one of the largest in the world. It has admitted to U.S. and British regulators that it manipulated the London interbank offered rate, or Libor, which basically measures how much it costs banks to borrow money from one another for various periods of time. If you ever read the fine print on a home mortgage, credit card agreement or car loan, you've...
Government regulation opens the door for collusion between regulator and regulated. In the long run more regulation makes it harder for smaller competitors and startups. The cost of regulatory compliance is too great. Competition and innovation suffer. Regulation equals power, and power corrupts. It has always worked that way.
As William F. Buckley used to say, "The problem with capitalism is capitalists. The problem with socialism is socialism."