LaRocco Says Risch Philosophy on Lax Regulation of Markets Led to Wall Street Meltdown

Press Release

Reacting to the meltdown on Wall Street, U.S. Senate candidate Larry LaRocco said today, "That's what happens when you allow regulators to fall asleep at the switch and put the fox in charge of the henhouse, as Jim Risch has called for."

In January, as reported in the Lewiston Tribune, Risch said: Regulatory agencies, local and state governments should get out of the way and let businesses do what they do best, which is operate the economy.

Jim Risch's call for elimination of oversight and regulation is exactly what has taken us to the brink of a national crisis, LaRocco said.
Lack of regulation allowed speculators to manipulate the oil futures market and cost American working families billions of dollars at the pump. Today's world wide market meltdown is a result of that same type of approach—the approach that Jim Risch wrongly advocates.

The strong regulatory structure of US financial markets has been the envy of the world, LaRocco said. Jim Risch would stand that reputation on its head with his approach. And his approach favors Billionaires not working Idaho families.

"When you gut oversight, you invite excess, and we're seeing the rotten fruits of those excesses now," LaRocco said.

He cited yesterday's news that Lehman Brothers will be dissolved, that Merrill Lynch had to be saved by the Bank of America, and that AIG is apparently on the brink of failure, as well as the earlier collapse and bailout of Bear Stearns and the federal takeover of Fannie Mae and Freddie Mac, in addition to sky rocketing gas prices as evidence of the high cost of a lack of oversight.

"He just doesn't get it," LaRocco said.

"For 8 years the Administration has played fast and loose with the regulatory regime that has made our markets strong and competitive and now the result has been the disaster we're now witnessing," he said. "Our system has gotten out of balance and Wall Street and the largest institutions have gotten subsidies, tax breaks, bailouts and a blind eye to their excesses while ordinary families have suffered. Average American families are actually making less than they did eight years ago," LaRocco said.

"We simply cannot afford any more of this administration's failed economic policies," he said. "We need a new approach built on opportunity and prosperity for working families."

LaRocco reiterated his call for a 100-day summit for Congress to address critical issues in a pragmatic, bipartisan manner, and he said the crisis on Wall Street and in the housing market must be "at the top of the list."

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