After years of unraveling regulations that "stifled the free-market," we're in the early stages of re-regulating everything. Some of the ideas are good, most are bad. Our regulatory systems and enforcement can always be improved. But let's be honest about what's really going on here.

Every time a market crashes, legislators decry shoddy rules, structures, and enforcement and demand that regulation be strengthened. The SEC was created in the early 1930s after the 1929 crash. Insider-trading laws were tightened after 1987. Sarbanes-Oxley was blown through in the wake of Enron. Etc. And now that the housing and stock markets are tanking again, legislators and the public are once again screaming for more regulation!

More regulation sounds great--until you remember that, in good times, when all people have to do to win is play, they want less regulation, not more. In the bull stock market of the 1990s and the roaring housing market of the mid-2000s, the cries were for government to just get out of the way. People congratulated themselves for having the acumen to make money hand over fist, and were annoyed by "public servants" restricting their ability to do this.

(For example, many experts were screaming for years that mortgage lending had gotten out of hand; It wasn't that no one realized this--It's that they didn't believe it and/or didn't want to hear it.)

In bear markets, meanwhile, the same folks who were congratulating themselves for being so brilliant in bull markets start losing money by the bushel. It's unpleasant to acknowledge that your success in the good times might have been the result of the market, not you, and it's a lot easier to blame someone else for your current pain. So that's what everyone is starting to do now: blame shoddy regulation. If the downturn continues, the finger-pointing will eventually proceed to prosecutions, scapegoating, and the tossing a bunch of designated villains in jail.

New regulations will be adopted, all with the aim of preventing "what happened last time" from happening again next time. Some of the new rules will probably help things, some won't. (Regulators tend to fight the last war, and unless new regulations are adopted with extreme care, they usually create as many problems as they solve).

But as you listen to the cries for this new regulation, remember what people are really crying out for: A way to eliminate bear markets. A way to make the economic cycle as safe as a savings account. A way to make it impossible to lose money while retaining the ability to make it hand over fist.

Can't blame people for dreaming, but it ain't never going to happen.