Wall St. mess puts regulation back in play

WASHINGTON, Oct. 14 (UPI) -- U.S. congressional members, regardless of party, are revisiting business rules and regulations in light of the recent Wall Street meltdown, an analyst says.

As the U.S. Treasury Department and the Federal Reserve pump money into banks and corporations to shore up their liquidity, a more regulation-friendly atmosphere is moving into such sectors as the environment, healthcare and product safety, The New York Times reported.

"We now have a collective anger, disgust, over our whole financial system and it's obvious we're going to get a regulatory backlash," said Robert Litan, a Brookings Institution economist who tracks financial and regulatory issues. "And we know it's going to come in a big way in 2009."

Litan told the Times he expects a regulatory spillover into other industries because voters perceive "big companies are animals and they need to be put in their cages."

Another observer expressed more caution about an attitudinal shift toward greater regulation. Sam Peltzman, a University of Chicago professor and free-market conservative, said more regulation didn't depend on the elections solely.

"It depends on the economy itself," Peltzman told the Times, adding that government most likely wouldn't impose expensive regulations during bad times, no matter which party is in control.