Simple truth: The more control government gets, the less effective it becomes. I’m embarrassed that I have to make this incredibly obvious point, but with Dodd-Frank now micro-managing our investment portfolios, I feel it needs to be said. Anyone want to argue whether Greece is fulfilling its fiduciary obligation to citizens?

The latest SEC 151A debacle is a perfect example. A high number of unsuitable sales by unscrupulous insurance agents got the agency’s ire, and they thought they could do a better job than individual state insurance departments. So Chris Cox, in a classic case of intergovernmental overreach, went for it. What he got (or rather what his successor got) was a solid judicial kick to the head for the umpteenth time.

And while they were making an argument for more jurisdiction, we had Bernie Madoff, Sam Israel, Alan Stanford, Richard Scrushy, Joe Nacchio and countless smaller acts of fraud that flowed from the spigot like crude from the Gulf. This despite a tripling of the SEC’s enforcement budget in the wake of Ken Lay and Bernie Ebbers to ensure it “never happens again.” Now Mary Schapiro will receive 800 new people to implement control given to her under the financial reform bill (excuse me, law).

As I’ve mentioned many times before, accountability has morphed into accountabalism, which in part mistakenly holds that complex problems can be solved at the next level of detail – one more form, one more policy is all it will take. We have 533 new rules in the financial reform package. If the number of new rules is inversely proportional the effectiveness of the overall legislation (and there is plenty of precedence to make that case), we’re seriously screwed.