|And finally, we come to the final card. Perhaps industry’s strongest card–“we’ll lose money”–is not really denialism, but it is what motivates so much of the bad rhetoric in public policy debates.
And of course, the truth is more nuanced. Proposals for reform create new opportunities, and many businesses have thrived under the very proposals they said would wreak havoc.
“Wall Street…has greeted practically every important market regulation introduced in this century with howls of dismay and predictions of disaster. In 1934, the head of the New York Stock Exchange told Congress that if the Securities Exchange Act, which became the foundation of market regulation in the U.S., was made law there was a chance that stock trading in the U.S. would be “entirely destroyed.” Needless to say, it wasn’t. In 1975, when the S.E.C. abolished fixed commissions, the Street claimed that its business would be demolished. Instead, after transaction costs fell, trading volume shot up. And in 2000, when the S.E.C. required companies to disclose material information to all investors, rather than just to insiders, we were told that this would strangle the flow of information to the market and make stock prices swing wildly. But, as numerous academic studies have found, it has actually done the opposite…” James Surowiecki, Over There, New Yorker Magazine, Feb. 2, 2007.