This week “60 Minutes” highlighted an obscure statute that some say is at the root of the recent market meltdown: the Commodity Futures Modernization Act of 2000. The CFMA exempted certain derivatives from existing state and federal regulation. But “60 Minutes” failed to ask the most interesting question: Why was the exemption needed? The short answer is that both federal and state law banned many useful financial transactions. The problem wasn’t regulation, it was prohibition. The only way to avoid the bans was to get out from under the statutes. …
