Redo Financial Regulatory “Deform”
In the summer of 2010, Congress passed the Dodd-Frank bill, better known by its misnomer, “financial reform.” This bill, which exceeds 2,300 pages, will cost $30 billion and take many years to implement. Unfortunately, it does little to shield Main Street from the alleged risks of Wall Street.
This move for comprehensive reform, or really, deform, stems from the concerns of the American people following their bailouts of Wall Street with TARP (Toxic Assets Relief Program) to prevent the forecasted collapse of our economy. The sweeping legislation posed new restrictions and created new regulations for many sectors of the financial industry- from credit card companies to massive banks to accounting firms.
Like many things in politics, however, the devil is in the details. While Democrats sold the measure as a means of the government playing watchdog on behalf of the American people, the Dodd-Frank bill actually compounded the problems facing our nation’s economy. This financial overhaul created a protected group of “too big to fail” firms that allows the federal government the power to bail them out whenever “deemed” necessary. Additionally, the bill would allow the federal government to seize private property without judicial review if the owner keeping his or her rightful property results in “serious adverse effects on financial stability.” The bill also adds $20 billion in taxes for the next ten years.
What’s worse: the former chief of the FDIC, Bill Isaac, says that this bill does nothing to prevent a future financial crisis, the very concern that Democrats say the legislation was meant to address. It also did not include provisions to investigate Fannie Mae and Freddie Mac, the two government entities whose failures cost the American taxpayers more than $6 trillion. It’s also worth mentioning that the bill includes special protection for Big Labor and perks for President Obama’s supporters.
Eliminating the burdens of cumbersome federal regulations would provide an immediate boost for our weakened economy. It would signal to businesses and investors that the federal government intends to get out of the business of over regulating. Where regulations are required the states will do their job. Consumers and investors do not need nanny-state federal regulations to save them from themselves.
Alleviate Excessive Regulatory Burdens
The federal government has amassed incredible amounts of control through its ability to regulate everything from emissions to food to businesses. Certainly, some regulation is necessary to protect American consumers and taxpayers, but excessive regulation has driven up the price of the goods and services we want, need and desire.
According to the Heritage Foundation, burdensome regulations have increased at an alarming rate. In 2010 alone, Washington forced 43 major new regulations on us. The cost of complying with these additional measures is more than $26.5 billion, which according to Heritage, is “far more than any other year for which records are available.” Experts anticipate that with health care “deform,” financial regulatory “deform” and other liberal agenda items, next year’s regulatory costs will skyrocket farther.
We pay for regulations with every bite of food we eat, with every drop of gasoline we put in our cars and with every good or service we obtain. While we might not immediately recognize the impact of such drastic regulations, they are laced tightly in the cost of everything we buy. In fact, the Small Business Administration estimates that complying with regulation costs around $1.75 trillion annually, which is actually twice as much as all revenue from individual income taxes last year.
Alleviating the burdens of cumbersome regulation would be an immediate boost for our weakened economy. It would signal to businesses and investors that the government intends to maintain conditions that allow for them to thrive, not to bog them down with additional costs they must inevitably pass on to their consumers. No one is arguing for lead-based paint in toys for kids or unsafe food. We just want reasonable regulations that cut down on bureaucracy and help businesses succeed. And ultimately, the free market, aided in part by the watchful eyes of investors and consumers, will regulate itself.
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