“The only thing we learn from history is that we learn nothing from history.”
-Friedrich Hegel quotes (German Philosopher (1770-1831)
Representative Darrell Issa of California recently sent letters to more than 150 companies, trade groups and research organizations asking them to identify federal regulations that they wanted to see repealed or rewritten.
This is a splendid idea, as we have learned this past decade. No one is in a better position to know what rules are restraining economic recovery than the companies that have to live under their restrictions. Indeed, what could be more intelligent than allowing entities whose fiduciary obligations are to maximize profits by any legal means available to rewrite their own rules?
Let’s see how that has worked out recently:
1. Leverage: Large iBanks wanted to determine their own leverage regulations. They petitioned the SEC to have those old 1970s era Net Capitalization rules tossed out,]. The government agreed, and the 5 largest banks were allowed to determine their own leverage rules . . . How did that work out?
2. Deepwater Oil Drilling: The Oil Industry has been allowed not only to write their own regulations as to the safety requirements for offshore deep water drilling, but they were also the ones in charge of enforcing these rules! . . . How did that work out?
3. Derivatives: Underwriters didn’t want to be bothered with pesky rules that had reserve requirements that limited underwriting, counter-party disclosures, exchange trading rules, capital requirements, indeed, any oversight whatsoever . . . How did that work out?
4. Lend-to-securitize non bank mortgage underwriters: Rules were proposed both at the Federal Reserve level and in California (where most were located), but the decision was made to allow these “Financial innovators” top self regulate . . . How did that work out?
5. Glass Steagall: The repeal of legislation that kept Wall Street risk taking separate from Main Street banking was a decade prior to a Derivatives collapse, frozen credit market and the worst recession since the great depression . . . How did that work out?
6. Federal Pre-emption: Various states had regulations in effect to prevent predatory lending. Responding to Bank requests, the regulations were removed by Federal mandate (so much for states rights) to allow “unfettered banking.” . . . How did that work out?
7. Abdication of traditional lending standards: Federal Reserve enforcement of lending rules requiring lenders to verify the borrowers ability to repay loans were ignored. This allowed banks to sell products such as 2/28 ARMs, Interest-Only Loans, and Negative Amortization mortgages without any oversight . . . How did that work out?
The list goes on and on. We could talk about Food safety, products that strangle infants, unsafe effluent discharges into drinking water, etc. Suffice it to say that self-regulation by corporate entities has been a complete and unmitigated disaster.
However, if you are interested in dropping to your knees to raisie money from corporations, wrapping your lips around that purple phallus spurting campaign contributions, whoring out the electorate so you can reap the benefits of your elected positions, then OF COURSE you ask corporate entities how they want to be regulated.
The Romans had a punishment for corrupt politicians: Cut off their noses, tie them in a burlap sack nude with a feral wildcat, throw the entire kit & kaboodle into the river. The Romans were onto something . . .
G.O.P. Asks Businesses Which Rules to Rewrite
NYT, January 4, 2011