America is the wealthiest nation on earth, with financial markets that are the envy of the world. Those markets have contributed to America’s rise for the past 250 years. Yet, many single-minded critics continue to paint these markets negatively. Pop culture, for instance, from 1987’s Wall Street to 2013’s The Wolf of Wall Street, often portrays those who work in finance as an incorrigible group of elite fraudsters.
Norbert J. Michel and Jennifer Schulp, finance experts at the Cato Institute, demonstrate that such cynical views of America’s financial markets are frequently unfounded. Unfortunately, government regulators have seized on this distorted image as justification for meddling in the markets. They often decide which assets are too speculative or risky and justify curbing investor freedom in the name of promoting financial stability.
In Financing Opportunity, the authors set out a better approach. They show that markets tend to be stronger with fewer constraints that trap and direct capital. In their estimation, to keep leading at the world stage, America “must shift away from a regulatory system that requires federal officials to make decisions for people, and toward one that protects them from fraudulent behavior” (pg. 4).
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