The idea that you can stop the derivatives trade or any other form of risky trade is ridiculous. What are you going to do, regulate the entire world? People will find offshore markets where the trades are legal, then the governments will need to put up protectionist policies to prevent the flow of capital from the home country to the outside world.
Let's watch every one, and control every one's movements, to prevent them from gambling with their money in the derivatives market!
That's the philosophy behind the pro-regulation proposals.
There are already 264,000 people working for federal regulatory agencies, at a cost of $43 billion a year:
http://jewishworldreview.com/jeff/jacoby112108.php3 Adjusting for inflation, the regulatory budget has grown from $25 billion in fiscal year 2000 to an estimated $43 billion in FY 2009 - a 70 percent increase. "In constant dollars," writes James Freeman in the Wall Street Journal, "the Bush regulatory budget increases vastly exceed those of predecessors Clinton, Bush, Reagan, Carter, Nixon, and, yes, Lyndon Johnson." Staffing has skyrocketed, too. Regulatory agencies employed 175,000 people in 2000. They employ nearly 264,000 today.
The pro-regulation people want more.
It's silly to try to prevent gambling, drug use, or risky financial trades. People will do what they want to do. The answer is to cut off the social safety net and not give bailouts so people are responsible for their mistakes.
If people want to gamble, it's their money. People need to be responsible for themselves. If someone invests their money in a hedge fund that risks all the money in the derivatives trade, that's their own fault. It's time to stop socializing due diligence.
"I have sworn upon the altar of God eternal hostility against every form of tyranny over the mind of man"
Inscribed on the roof of the Jefferson Memorial