In the run-up to the Nov. 4 election, We asked candidates in contested races what they might have learned from the financial crisis, and how they might apply the lessons as representatives of the American people in the offices they are seeking. Here are the responses of U.S. Senate candidates Tom Udall and Steve Pearce, and from Jerome Block Jr., and Rick Lass, candidates for the Public Regulation Commission.

By Steve Pearce

Confidence is slowly being restored to world markets due in part to governments around the world pledging trillions of dollars to bail out a financial system on the verge of collapse.

But while this is good news, especially after the stock market free-fall earlier this month, ask yourself if it really had to come to this. Taxpayers have seen their 401(k)s drained of cash, credit is scarce and our financial future uncertain. Will people lose their homes? What will they do about their retirement? These are the types of questions being asked around the kitchen tables in homes across New Mexico and the nation.

Washington usually responds incorrectly to crises, many times creating unintended consequences. So what should the government role be? How do we find the right balance between enough regulation to protect against abuses but avoid over-regulation that stifles markets? As a member of the Financial Services Committee in the House of Representatives, this is a question I have dealt with often.

Multiple times President Bush warned Congress of the need to update rules governing government-sponsored enterprises such as Fannie Mae and Freddie Mac. It was not just an attempt to add more regulation, but rather to institute real reforms that can react to light-speed transactions and new financial instruments.

Each time, Democrats blocked the reforms. In retrospect, this was a grave miscalculation. Just as Democrats couldn't pass the recent bailout legislation without support from Republicans, Republicans couldn't pass GSE reform without support from Democrats. Therefore it went undone and prevented us from finding solutions. Today we are paying a very heavy price.

In order to prevent a problem such as the one we currently face, we need a robust and authoritative body with the tools to oversee market practices in the financial sector and on Wall Street.

To make that body most effective, transparency and the free flow of information are critical. All stakeholders — employees, investors, shareholders and even the general public — should have access to as much information as possible about a company's business practices to make educated decisions. In a number of instances, the lack of transparency allowed corporate executives to engage in corrupt accounting practices, and by the time those practices were discovered, it was too late. Some companies overextended themselves, sometimes leveraging their debt-to-equity ratios 30 to 1 or more. Mark-to-market accounting caused problems in otherwise healthy companies. Ending these practices and increasing transparency guarantees protections for stakeholders.

We must investigate and prosecute companies that engage in bad practices. If Martha Stewart went to jail, certainly we must investigate those who caused the downfall of the world's economy. We need to send a message to those who engage in bad practices for personal gain. The Federal Bureau of Investigation should hold accountable corporate executives who break the law or attempt to deceive stakeholders. We cannot allow the lessons of the current catastrophe to go unlearned and find ourselves dealing with the same problems in just a few short years.

The government has not just an interest, but an obligation to protect our free-market system. The free market creates opportunities for everyone to succeed, not just high-income earners, but those with middle- and working-class incomes, as well. This country, throughout its history of capitalism, has provided the highest standard of living in human history. What some would consider to be low-income in this country would be middle- or even high-income in other countries around the world. We should continue to maintain the free-market principles that create such opportunities while addressing abuses in the system.