Per a July 5, 2008 story in the New York Times, the Security and Exchange Commission (SEC) is preparing in the waning days of the Bush Administration to dilute regulations meant to protect American investors. It wishes to let American corporations switch to international accounting rules which would permit them to inflate their earnings reports and hide bad loans and their exposure in derivatives markets. It would roll back the prohibition on corporations hiring accounting firms to perform external audits at the same time they are being paid consulting fees, a clear conflict of interest. Think Enron’s relations with the accounting firm Arthur Andersen and how well that turned out for both of them. It wants to permit foreign brokers regulated by foreign governments, in place of the SEC, direct access to American investors. Finally, it would accept foreign certification, again in place of its own, of some 800 foreign auditors of foreign companies. After the dot com and housing bubbles, in the midst of the commodities bubble, after the collapse of companies like Enron, Long-Term Capital Management (LTCM), and Bear Stearns, the SEC has learned nothing. Despite all of these very expensive debacles, the SEC’s response is to reduce oversight and encourage reckless behavior. As Einstein is supposed to have remarked insanity is “doing the same thing over and over again and expecting different results.” This is what the SEC is doing now. Madness.