"Protecting the investor" really means "excluding the small investor"

Felix Salmon points out in the NYT just how marginalized equity markets are becoming with more and more high return investments only available to the very rich.  It may turn out that the wages of ultra-regulation are increased income and ultimately social and political inequality.

Only the biggest and oldest companies are happy being listed on public markets today. As a result, the stock market as a whole increasingly fails to reflect the vibrancy and heterogeneity of the broader economy. To invest in younger, smaller companies, you increasingly need to be a member of the ultra-rich elite.

At risk, then, is the shareholder democracy that America forged, slowly, over the past 50 years. Civilians, rather than plutocrats, controlled corporate America, and that relationship improved standards of living and usually kept the worst of corporate abuses in check. With America Inc. owned by its citizens, the success of American business translated into large gains in the stock portfolios of anybody who put his savings in the market over most of the postwar period.

Today, however, stock markets, once the bedrock of American capitalism, are slowly becoming a noisy sideshow that churns out increasingly meager returns.

Somewhere Frederic Bastiat is smiling.  Hat tip National Review.