The shock of the financial meltdown has had congressional committees scrambling for their gavels for the better part of a year. Politicians have been discussing how to make sure that such a near-cataclysm never happens again, and, for the most part, they've focused on the need for new regulation. What's called for, President Obama said in March, is "a financial regulatory mechanism that prevents the kind of systemic risks that have done so much damage over the last several months."

But all the talk of regulation misses a key point: If we don't know which institutions are doing what--if we don't actually monitor what we've regulated--then that regulation won't work.

In 2001, an entrepreneur named Tom Casten traveled down to southern Louisiana, near the small town of Franklin, with a clever idea. For decades, the area had sustained a pair of chemical plants that produced carbon black, a grimy powder used in printer ink and tire rubber. But the owner of one of the plants, Cabot Corporation, was struggling to compete against cheap tire imports from abroad, and desperately seeking ways to cut costs. That’s where Casten came in. He pointed out that the gas left over from the carbon-black process was just getting wasted--burned off and flared up into the sky. He proposed building a recycling facility that could capture the gas and use it to generate electricity. Not only would this make the plant slightly cleaner--carbon-black plants are notorious polluters--but there’d be enough juice to run Cabot’s operations, and for less than it cost to buy power from the local utility. In all, the company could save up to $1.3 million per year.