Harvey Pitt, regulator redux

There's a story today in the NYTimes about how regulatory enforcement under Trump, especially the SEC, has seen a noticeable drop-off from the Obama era. It is a solid article, with appropriate and thoughtful caveating where appropriate, but its basic thrust seems well-documented and is not shocking.

What did surprise me is a quote from Harvey Pitt, who ran the SEC for a while under Bush before rolling out to start his own firm, which is now a consulting firm but back then was doing something around hedge funds. I saw him talk at a hedge fund conference in 2007, as I documented in this post. Back then, as I documented, Pitt didn't really envision the regulatory function of government as one that needed to be particularly proactive.

But today he is quoted in the Times as saying this: "The goal is really to instill in those who are regulated the illusion that the government is everywhere and looking over your shoulder. If you take away that threat, that could embolden some to keep breaking the law." I don't know what has occasioned this change of heart, but I for one ain't buying it.