It's important to note that he doesn't despair of regulation in general, just that regulation that represents a knee-jerk response to current events. This "regulation," often crafted in a manner that ignores both theory and practice (not to mention history), has only one objective: preserving the incumbency.

Why else, in the case of Sarbanes–Oxley, would the casualties of WorldCom's illicit lying (mutual funds) be punished for the very crimes that victimized them? Is it any surprise that many deem Dodd-Frank a colossal failure for its part to institutionalize the very problems it was supposed to solve?

Nothing exemplifies this more this more than tortured "fiduciary" language contained in the partisan bill (two of the only three Republicans who voted for Dodd-Frank—all senators from New England—no longer hold their seats).

In an effort to appease certain industry lobbyists, the authors of the bill made a last-minute change that added, in so many words, "and preserve the existing brokerage business model" to the law's call for the SEC to consider requiring a universal fiduciary standard. Unfortunately, in the real world, this is one cake you cannot both have and eat, too.

The DOL, not under the oxymoronic constraints of Dodd-Frank and under the valiant efforts of Phyllis Borzi, initially attempted to do the right thing. But, by then, the issue had become politicized to such an extent even Democrats who supported Dodd-Frank came out against the DOL's proposed fiduciary rule.

Indeed, why fiduciary reform ever got entangled with the credit crisis is a Rube Goldberg puzzle scholars will continue to try to solve for years.

Let's be clear about one thing: There is a problem that an "adviser" is legally bound to always place the client's best interests first while an "advisor" is under no legal obligation to act in the same manner.

This confusion is not in the investing public's best interests and needs to be resolved. The only way to find the correct solution is to put the investing public's best interests first, not the best interests of a particular industry's "business model."

But let's be clear about another thing: Regulators—and the elected officials that pull their strings—have a sorry record of focusing on the best interests of those they have been tasked to protect. Too often we find their fingers on the pulse of some poll of an unenlightened electorate or their hands in the pocket of industry lobbyists.

We're getting to the point where, beyond a certain very minimal amount of regulation, customers are best left off looking out for themselves in the wild west of the open market, rather than becoming forever shackled to regulation designed for and written by the best that money can buy.