Naked Capitalism Link of the Day

Today's link: The Bankers Who Cried Wolf: Wall Street's History of Hyperbole About Regulation, at the Huffington Post:

Coming from all over the country, hundreds of investment bankers from financial powerhouses like J.P. Morgan gathered for dinner at the Waldorf-Astoria to discuss their shared concerns. Chief among them: The spread of investor protection laws, which they denounced as "foolish, crude and unconstitutional." Bond broker Warren S. Hayden said the laws were paternalistic and wrong in theory, arguing that they would hurt the industry by limiting the activity of securities dealers. Bank attorney Robert R. Reed called the new rules an "unwarranted" and "revolutionary" attack upon legitimate business.
That was almost 100 years ago at the inaugural meeting of the Investment Bankers Association in New York City. The group was opposed to laws passed by Kansas and other states that sought to protect investors from fraudulent sales and practices by requiring companies issuing securities to register and receive a permit before selling stocks.
These "blue sky laws" were prompted by an epidemic of securities fraud. Hucksters, who were so dishonest that it was said they would sell "building lots in the blue sky," ripped off thousands of unsuspecting farmers in the Midwest during in the first decade of the 20th century. The laws were supported by small- and community-banks and were popular with the public.
By 1913, two years after Kansas passed the first investor protection law, 22 other states passed similar regulations. An effort to enact a federal version failed amid intense pressure by Wall Street executives, who claimed that it would have a disastrous impact on the financial services industry. Bankers magazine warned that such laws would create "a nation of fools and weaklings" by protecting people against their own mistakes.
But those predictions proved mistaken. Bank profits grew in the five years after the adoption of the most stringent blue sky laws, according to research by University of Virginia School of Law professor Paul G. Mahoney. And the big national banks that opposed the laws mushroomed in size, with average total individual deposits increasing more than 25 percent from 1914 to 1916. (Much of that can also be attributed to a flood of European money amid the First World War.)

It is kind of weird to reflect back on when Kansas was the forefront of populist/progressive legislation.  Those days are long gone.  The rise of agribusiness and the virtual elimination of the small farmer have made Kansas one of the most reactionary states in the United States.  It is a damn shame that rural America has become the enabler of the greedy rich in our financial system, helping them to take over our economy and our political system to steal more and more from the average worker.  I have my theories for why this is the case, but it is extremely detrimental to our rural areas, and is paving the way for a collapse of standard-of-living for the majority of Americans from which we won't be able to recover.  The disinvestment which is ongoing in our national education system and infrastructure systems will damage our standing beyond repair.  Why is it occurring?  Because the ultra-wealthy want to keep more for themselves, and can only see in the shortest-term time frame.  This short-term thinking brought about the financial disaster we are now in the midst of, and more of the same will cripple the nation for the foreseeable future.  The financial elite have never been truthful or accurate in their predictions, they are just able to reach into the national treasury and bail themselves out.