Regulatory capture is a term used to refer to situations in which a government regulatory agency created to act in the public interest instead acts in favor of the commercial or special interests that dominate in the industry or sector it is charged with regulating.
The SEC and other government posts like the Secretary of Treasury are unduly influenced by the finance industry. In fact, as the article points out, those government positions are often filled with alumni from the finance industry.
http://news.ycombinator.com/item?id=518776
Over time special interest groups work to reduce a society’s efficiency and GDP by enriching themselves -- in this case it's the financial industry.
Another common idea is regulatory capture:
http://en.wikipedia.org/wiki/Regulatory_capture
Regulatory capture is a term used to refer to situations in which a government regulatory agency created to act in the public interest instead acts in favor of the commercial or special interests that dominate in the industry or sector it is charged with regulating.
The SEC and other government posts like the Secretary of Treasury are unduly influenced by the finance industry. In fact, as the article points out, those government positions are often filled with alumni from the finance industry.