11/03/11 Root of the Problem


By now, America has seen enough of the bad behavior of the ‘Occupy’ movement protesters. 

That aside, it’s easy to understand their frustrations when it comes to the excesses of Wall Street.

But the protesters’ anger is misdirected.  The causes that led to the 2008 and [2009] bailouts began in Washington, DC. 

The federal government passed measures such as the Community Reinvestment Act, lowered the capitalization minimums for Fannie Mae and Freddie Mac, and insisted banks give mortgages to people who couldn’t afford them.

Just like Soviet planners, Washington politicians thought they could rewrite the laws of economics. 

Dodd-Frank, the finance law enacted last year, continues the problems.  Contrary to the claims of its supporters, the law enshrines ‘too big to fail.’  And continues bank bailouts — forever.  Or until this law is repealed.

And speaking of the law, federal regulators who are supposed to enforce it — don’t even abide by it.  At least five agencies that regulate the financial industry are paying federal employees more than the law permits.

These agencies are:

the Consumer Financial Protection Bureau;
Commodity Futures Trading Commission;
Office of the Comptroller of the Currency;
U.S. Treasury;
and the Securities & Exchange Commission.

Nearly 200 employees are paid salaries of $225,000 or more.  This is more than allowed by law.

In Washington, laws are what the people follow.  And not the politicians and bureaucrats.