This week our great leader will sign the new financial regulation law just passed by Congress. This law will create another gigantic federal bureaucracy called the Consumer Financial Protection Agency. More government jobs will be available for more highly-paid union workers who will perform inadequately, creating more problems than they were supposed to solve. Anyone want to take a bet on this?
On June 30, 2010 the Chairman of the house banking committee, Barney Frank, issued the following statement. “ The federal regulatory system has clearly failed to provide adequate protection for consumers, and that failure contributed to the broader economic crisis. That is why I have made the creation of the agency one of our highest priorities.” This is the same Barney Frank who supported the Community Redevelopment Act which mandated that banks make risky real estate loans to low income borrowers, thereby creating the real estate crash of 2008.
It is notable that Frank realizes that the “federal regulatory system has clearly failed”. This new federal “Consumer Financial Protection Agency” will be no different. It will be staffed by educated, union card-holding laggards who will do half of a days work for a day and a half’s pay. It will harass banks and other financial institutions with costly compliance rules, driving up their costs, which will be passed on to all consumers. It will dry up what little credit exists for the lowest income consumers by over-regulating their lenders and putting them out of business.
When all is said and done this new government agency will deliver little public benefit, but it will be yet another building block in the socialization of the American economy. How terribly unfortunate this is.