Filling the SEC posts

By statute, there are five SEC commissioners, and no more than three of them are supposed to be members of the same political party.

At the moment, there are three commissioners, all Republicans. Presumably, the President could name a Libertarian and a Green Party member to fill the vacant spots, just so long as he doesn't name any more Republicans.

Of course, the two major parties have an implicit compact to ignore the existence of any others, so given that pact it was always a near certainty that Mr. Bush would nominate two Democrats. The open question was one of timing -- how long would he let the SEC drift along understaffed rather than nominate Democrats? The second of the two Democrats to depart, Annette Nazareth, has been gone since the end of January.

The White House answered that question yesterday, naming Elisse Walter and Luis Aguilar as its nominees. Although anything is possible -- some skeleton could pop out of a closet -- there seems no great difficulty barring either of these nominees from a quick confirmation.

With due respect to Mr. Aguilar, Ms Walter is the more interesting of the two to me just now. She's a career regulator. She's been working of late at the NASD, which of course is a private organization. But her job there is to head the "regulatory policy and programs." So she's one of the securities industry's primary "self regulators," the folks who try to prove to the SEC that "everything's under control over here -- no need to make a fuss over us." That makes her a government regulator by proxy.

She was a full-fledged government regulator for two years, roughly the second half of Bill Clinton's first term, when she was a member of the SEC's sister agency, the Commodity Futures Trading Commission. That's the job she left in 1996 to take the post at NASD.

So what? As I've mentioned here a time or two, I'm an anarcho-capitalist. I'm no fan of either the CFTC or the SEC. They tend to cause the problems they pretend to cure. I say this not in a dogmatic ideological way but as a pragmatic conclusion from my understanding of the course of human history.

Thinking "within the box" though, I'd just as soon if we have to have regulators we take somebody right out of a trading pit, somebody who's career has been spent in a colorful jacket jumping up and down shouting "BUY! Soybeans BUY!" or whatever exactly they yell. Or that we pluck somebody from behind a computer screen where he's been doing the same thing without the pantomime.

Or (poor third best) if we must have lawyers in these agencies, we have lawyers who've spent their careers concerning themselves with the interests of the folks in the trading pits.

It distresses me that regulators spend their whole career as such, shuffling around from one regulatory agency (or its proxies) to another.

Bah, I say. Bah and humbug.