Milton Friedman used to point out that one problem with any government operation was that they were all too big to fail. If a private firm couldn’t do its job to the satisfaction of its customers, it failed. When a government operation can’t do its job, it gets its budget increased.
If you want proof of that, just look at the discussions under way about the SEC. Moments after its failure to detect Bernie Madoff’s fraud despite ample warning came to light, their was a chorus of voices saying that the SEC should be rewarded for this failure with a budget increase. This is why being in government is like being in love: you never have to say your sorry, and in the long run we’re all dead anyway.
Economist Bob Murphy eviscerates the idea that the SEC was somehow underfunded in an essay published by the Mises institute today. Read the whole thing, but here’s the meat of his argument.
“The SEC under George Bush has the biggest budget and the most personnel in its history. The charts below show the annual budgets and “full-time-equivalent” staff for the SEC by fiscal year. These numbers were obtained from the annual SEC reports archived here,” Murphy writes.
Murphy’s charts show the growth of the SEC budget and staff.