Regulatory Capture

Jon Stewart’s segment on Jamie Dimon’s testimony to the House Banking Committee is like a distillation of everything wrong with the relationship between Wall Street and Washington.

The econ-speak for a scenario in which public institutions start acting in the interests of the private firms they’re supposed to be regulating is regulatory capture. An analogy: regulatory capture is like if Lebron James was allowed to pay for the privilege of officiating the NBA finals.

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