…is in its last days, but it keeps on trying to keep in our business. In an article for an upcoming issue of New York University Journal of Legislation & Public Policy, Secretary of the Treasury Jack Lew
made a closing argument Wednesday in defense of the financial regulatory overhaul the Obama administration engineered during the past eight years.
Among his arguments:
Mr Lew makes the case that those new entities [e.g., the Consumer Financial Protection Bureau and the Financial Stability Oversight Council] allow the government to react to new forms of consumer abuse or financial engineering.
That’s part of the problem, though. It’s these new entities that define “new forms of consumer abuse” without regard to statutory definitions passed by our elected representatives. It’s these new entities that define new forms of financial engineering as unacceptable or not, without consideration of whether the new forms actually are good ideas.
Progressives like Lew actually think such government overreaches are features and not failures.
A regulatory regime that becomes frozen in time will by its very definition be outpaced by those that seek to arbitrage it….
Lew is carefully ignoring the fact that a regulatory regime as unaccountable and as agile as he wants one to be will by its very definition be in a position to, and will, block free market moves of which an overreaching government decides to disapprove.
It’s a failed argument for a failed régime. It’s time for Lew to pack up and go home.