Soros's Fear

George Soros made his fortune out of predicting violent swings in the market, so his take on the current financial mess in the New York Review of Books is particularly timely. He acknowledges that this is no time for unregulated markets. “Since money and credit do not move in lockstep and asset bubbles cannot be controlled purely by monetary means, additional tools must be employed, or more accurately reactivated, since they were in active use in the 1950s and 1960s,” he writes. But he adds a note of caution on the dangers of regulating markets. “In view of the tremendous losses suffered by the general public, there is a real danger that excessive deregulation will be succeeded by punitive reregulation. That would be unfortunate because regulations are liable to be even more deficient than the market mechanism,” he argues. “Regulators are not only human but also bureaucratic and susceptible to lobbying and corruption.”