Bad regulation bad; no regulation better

That seems to be the confusing message of this Wall Street Journal editorial bashing the close relationship between the head of the Commodities Futures Trading Commission and Jon Corzine, given the CFTC’s oversight failure in the MF Global mess. Here’s how the editorial ends:

In classic Washington fashion, Mr. Gensler is nonetheless using his agency’s regulatory failure in MF Global to impose still more rules and argue for still more power. A better response would be to acknowledge that the political system has already entrusted too much power to regulators, who can never be all-knowing and all-seeing but are often vulnerable to political influence from executives or firms they know and like. Investor beware: Regulators cannot protect you.

OK, I get the point that regulators can be weak or compromised. But why does the failure of this regulator to do his job well mean that we should reduce regulation (which is the obvious implication of the Journal’s “better” response)? I don’t get it. Isn’t this like saying that a corrupt or incompetent police chief who let’s a crook rob a bank under his nose leads to the conclusion that we have too many laws and we’d be better off reducing the number of laws and cops?