Is SEC Head-To-Be a Randroid?

Nick Gillespie | June 3, 2005

Via Sploid comes that question about Rep. Chris Cox (R-Calif.), who has been tapped by George W. Bush to become the next head of the Securities and Exchange Commission.

The Sploid link leads to excerpts of Cox's 1995 review for The New York Times of The Letters of Ayn Rand, in which the congressman writes:

"Despite her deserved reputation as a cool rationalist, nothing in her view that reason is the highest virtue implies a rejection of emotion. To the contrary, Rand herself rejected not only Communism, facism, and socialism, but also every economic system except free enterprise precisely because they subordinate the individual's pursuit of laughter, joy, and pride, and achievement to the 'greater good' of society. 'I cannot get away from the feeling that pure, abstract economics . . . forget the human element for the sake of the economic one,' she wrote in an early letter. 'Do economics have to fit man as he is or does man have to be
ground to a pulp to fit a preconceived economic mold?'

More here.

We might ask, of course, what's wrong with the SEC being headed by someone who believes in capitalism? (The short answer: Absolutely nothing, of course.)

Elsewhere, the reaction to Cox's nomination has been fraught with anxious Rand references ("a devoted student of Ayn Rand, the high priestess of unfettered capitalism," sniffs the International Herald Tribune) or outright condemnations ("the man who helped produce the Enron scandal" according to Alternet).

Despite lefty attacks such as the one in Alternet, there's no reason to think Cox will be a whore for corporate interests. Rather, he has a solid commitment to free markets, which is pretty damn refreshing from a congressman. As important, he has a commitment to free speech, as evidenced by his offering a free-speech alternative to the odious Communications Decency Act back in the '90s.

Reason interviewed him back in 1999, primarily about the then-hot issue of technology transfers to the People's Republic of China. Read it here.

Comments

|6.3.05 @ 10:11PM|#

Schumer said. "The question is whether Cox sees the need for balance. If he sides with somebody like Atkins, who doesn't believe in regulation at all, then we will have trouble."

It will be interesting to see if anything less than a choke hold will qualify as balance.

|6.3.05 @ 10:28PM|#

Despite what the leftists and rightists think, his Randist stance on free enterprise will probably have him at loggerheads with the Big Bad Corporate America. ...

Now, if we could just get a few more Randists in Congress we could say goodbye to stadium welfare and eminent domain...New York is so fuct.

BattleAx
Virginian in Brooklyn

|6.3.05 @ 11:13PM|#

What, is odious the magic word at H&R this week?

|6.3.05 @ 11:47PM|#

Is Bush still "worse than Nixon"?

Matt|6.4.05 @ 2:11AM|#

As others have pointed out, there's a substantial gap between being pro-capitalism and being pro-business-as-usual. Cox seems to be a fairly consistent example of the former. From my perspective, the only bad thing about him taking over at the SEC is that it means he won't be in Congress anymore...and serious capitalists are already far too rare in Congress, without losing one to the executive branch.

gaius marius|6.4.05 @ 8:46AM|#

his Randist stance on free enterprise will probably have him at loggerheads with the Big Bad Corporate America

indeed, few in the Real World would have anything to do with a randian (and not just for the social implications). corporations themselves understand better than extremist emancipatory philosophers the value of law in actual human systems, as opposed to reductive thought experiments.

who knows where cox's heart really lies, but putting a manichean individualist at the head of the sec to undo the purpose of the organization would be another affirmtive check on the list titled, "Is The Bush Administration Completely Divorced From Empiricism?"

i laugh at the idea of a person being a randian, actually. it's like proclaiming one's allegiance to zoroaster -- there's a sense of complete ideological isolation from any reality.

|6.4.05 @ 9:30AM|#

In the spring of 1998, then-Speaker Newt Gingrich was looking for someone to head a select committee investigation into technology transfers to the People's Republic of China. Given the campaign finance scandals of 1996, China was a hot topic, requiring some tact if the enterprise was to do anything except dissolve into partisan squabbling. Every other congressional investigation in the Clinton era had ended that way. The committee also needed someone capable of attending to details inside a very large picture. Few could have foreseen what the Cox panel would find.

In a few months the select committee found evidence of the theft of U.S. nuclear secrets by China stretching back decades. Further, it found that the Clinton administration's safeguards against the transfers of advanced military technology to China had been lax or nonexistent. Significantly, every Democrat on the panel signed on to the conclusions, and no minority report taking issue with the findings was generated.

-From the linked article.

and my question is, what has come about because of this investigation? Are we still selling our secrets to China, or has that leek been plugged?

-Nicanor

|6.4.05 @ 11:42AM|#

Cox's personal philosophies have little to do with his ultimate effectiveness as SEC chairman - it's more a matter of his response to real-world conditions. If he allows the current mayhem in the utterly unregulated derivatives market to continue, as well as the ongoing pension-fund underfunding and managed-earnings shenanigans of Corporate America, then he will fail and fail miserably, no matter what his devotion to Randian freedoms may be.

|6.4.05 @ 4:16PM|#

Nicanor - I believe that leek was eaten. Or worn in my hat on St. Crispin's Day.

Gaius - Ahura Mazda will rock your world. Do not fuck with Zoroaster.

|6.4.05 @ 5:50PM|#

How much difference will a Randian make at the SEC?

Well, let see. For how many years now have we had a Randian in charge of the Fed? And yet he turned out to be a plain old Keynesian.

|6.4.05 @ 8:07PM|#

if anything, zoroastrianism is more important to the world than ever before.

even gaius' personal jesus of the hyperindividualist v. civil society.

|6.4.05 @ 9:17PM|#

In the Dilbert World from which I must extract my sustenance, I had a hard-on for one Candy Cox.
If her name had been singular, then you would have questioned my proclivities.

Last post of the eve.

|6.6.05 @ 1:18AM|#

What Matt said. Which included: ...the only bad thing about him taking over at the SEC is that it means he won't be in Congress anymore...and serious capitalists are already far too rare in Congress

Cox's voting record in congress to keep federal spending low is damn good!

http://www.ntu.org/main/components/ratescongress/details_all_years.php3?house_id=47

With the exception of regulations which punish fraud, regulation of the markets is harmful. Often business regulation comes at the behest of businesses who seek to restrict their competition and they promote certain regulations as being good for the consumers, which they are not.

Mark B:

If he allows the current mayhem in the utterly unregulated derivatives market to continue...

What?? The derivatives market is most certainly not "utterly unregulated". It might be argued that it is less regulated than the securities market, but even that is debatable. There are a number of regulations in both markets whose elimination would benefit the investing public.

TallDave|6.6.05 @ 2:00PM|#

he has a solid commitment to free markets, which is pretty damn refreshing from a congressman

Amen.

gaius marius|6.6.05 @ 4:48PM|#

The derivatives market is most certainly not "utterly unregulated".

mr barton, they are utterly unregulated in every important sense. i hope i'm never proved out, but counterparty risk is not ascertainable, balance sheet leverage is not ascertainable, exposure is not ascertainable -- the whole shit is utterly opaque, and it should frighten people, especially participants in the markets.

|6.6.05 @ 6:07PM|#

gaius marius,

Speaking of derivatives (the purchase of call and put options) on stock equities. Exposure is clearly defined and limited to the price of the options contract. Since the balance sheet is an open book, and the amount of open interest is as well, leverage is easily calculable. Not opaque at all. What do you mean by "counterparty risk"?

BTW, one of the regulations that harms small investors in both the securities and options markets is the $25,000 account minimum day trading rule. Maybe Cox can do something about that one.

|6.6.05 @ 6:11PM|#

...Oh yeah. Also, what do you mean by: You hope you're "never proved out"?

|6.6.05 @ 6:33PM|#

OK, I know what you mean by "counterparty risk" now and it's not a consideration for the vast majority of equity options buyers. Can you cite any cases where the contact purchaser got welched out on in NYSE or Nasdaq options contract. It's got to be pretty rare and there are millions of contracts that go off every day.

|6.6.05 @ 11:45PM|#

gaius,

"Proved out"- It just occurred to me. You meant that you do derivatives and you hope that none of the bad possibilities that you see come to fruition in your case. Right? Relax. I think you overrate their likelihood.