Washington has released its latest assault on American liberty with the president’s recent signature of the massive financial overhaul bill.
Publicized by the White House and political left as a way to prevent another financial crisis, the bill is merely a vehicle for a government takeover of our financial sector. The rules and regulations contained in the bill’s more than 2,300 pages impose new bureaucratic red tape throughout the financial and banking industries. The U.S. Chamber of Commerce has coined the term “regulatory tsunami” to describe the burdens it will put on U.S. businesses. Chamber CEO Tom Donohue has said that the bill creates “over 350 required regulatory rulemakings, 47 studies and 74 reports.”
One of the bill’s largest affronts to the private sector is the creation of the so-called Consumer Protection Agency, which is charged with guarding consumers from unfair and deceptive practices. Housed within the Federal Reserve, the agency will have its own budget and an independent director appointed by the president. This entirely new bureaucratic agency has limited oversight and unlimited power to raise costs on consumers, restrict what products are available, and could make it harder and more expensive for consumers to get credit. Moreover, we already have a consumer protection bureau under the Federal Trade Commission. Creating a new agency is simply not needed and only adds another layer of bureaucracy. We should be enforcing the regulations already in place rather than spending taxpayer money to create a new agency to do the work of an existing division.
The bill also attempts to end the concept of “too big to fail” by enforcing a bankruptcy system that hinges on the federal government’s ability to take over large financial institutions. Rather than eliminating “too big to fail,” the government assumes the responsibility by having the discretion to decide which institutions should be seized and liquidated. Government takeovers completely destroy the free market system. It’s the nature of the free market that some companies succeed while others fail. When our national debt already reaches into the trillions, the government can hardly afford to takeover these businesses. Taxpayers will be on the hook to bailout the government when one of their takeovers goes under.
The innovative spirit that characterizes American businesses will be forced to take a backseat when government officials start monitoring and regulating systemic risk. The American Bankers Association expects that the bill equates to 5,000 pages of new regulations for banks. Imposing strict rules on large financial institutions will effectively stifle the innovation and capital that allows businesses to grow and strengthen our economy.
There’s little faith to be had in the government’s ability to successfully regulate anything. The soaring national debt and historic unemployment rate top a track record of miserable failures when government gets involved in the private sector. How can we have confidence that government will be able to reel in Wall Street’s risky behavior when they can’t even reel in their own spending?
In a recent report on the 100 worst stimulus projects, U.S. Senators John McCain (R-Ariz.) and Tom Coburn (R-Okla.) note that the stimulus package has helped push our national debt 23 percent higher, totaling a record $13.2 trillion. Out of those 100 projects, Georgia received about $5.5 million for initiatives such as studying improvised music and why monkeys respond negatively to inequity. Of course, leftists will argue that $5.5 million is just a fraction of the entire $787 billion stimulus package. Tell that to an unemployed mother or father whose salary could be paid 10 times over with that money. In his fervor to control Wall Street, Obama has forgotten about the real problems on Main Street.
The president also seems to have forgotten that unlike his family, most people living on Main Street aren’t vacationing at a 5-star Spanish seaside resort. The first lady and their daughter spent four days earlier this month at one of the world’s top 30 hotels with family friends and a “modest staff.” CNN reported that the party reserved 60-70 rooms, each of which are said to start at nearly $400 a night. The Obamas are also scheduled to take a second vacation to Martha’s Vineyard for 10 days later this month. Some Americans work for 10 years without taking a vacation. If this is a personal trip, why didn’t the Obamas do this sort of extravagant traveling before taking office?
While Obama wants to regulate the finance industry, he also blatantly abuses the people’s money. Instead of creating legislation that disguises the president’s perpetual takeover of American industry, we need common sense reform and a bankruptcy system that works without the government’s involvement and without stifling innovation in the marketplace. It’s time our president put his faith in the time-tested ingenuity of the American people.
Sen. Chip Pearson serves as chairman of the Economic Development Committee. He represents the 51st Senate District, which includes Dawson, Fannin, Gilmer, Lumpkin, Pickens and Union counties and portions of Forsyth and White counties. He may be reached at (404) 656-9221 or via e-mail at email@example.com.