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Tuesday, November 25, 2014
Sticks in Spokes
Sticks in Spokes
During the 2012 campaign, President Obama often resorted to his favorite substitute for thinking: ridicule. Before enthusiastic audiences (who were assured his reelection would spell a thriving economy and a revived middle class), the president would mock Republicans by suggesting that “they have the same prescription they’ve had for the past 30 years. … Take two tax cuts, roll back some regulations, and call us in the morning.”
Obama’s prescription, which we are now in a position to evaluate for effectiveness, was the most massive increase in regulation of modern times. There is no industry or economic sector that the Democratic Party does not believe would benefit from badgering interference from Washington. Adding insult, every new regulation is trussed up and presented as “being on the side of the middle class.”
Sometimes, as in the case of Obamacare, that required lying to voters about what the law contained. In the case of Dodd-Frank, it required insulating regulators from democratic accountability. The Consumer Financial Protection Bureau, a creature of Dodd-Frank, is not even funded by our elected representatives, but instead gets financed directly from the Federal Reserve. Translation: If the “middle class” ever decides that Congress should relieve it of the CFPB’s ministrations, they will be unable to exert any influence. Like HAL in the movie “2001: A Space Odyssey,” the CFPB has a life of its own.
It’s odd that Democrats are so rarely challenged on their claim to speak for the broad middle class, because the story of Democratic policy over the course of the past century has been to withdraw more and more power from ordinary people and place it in the hands of the unelected. They’ve succeeded very well with the judiciary and with federal agencies. Dodd-Frank, however, marks a new milestone. Not only does it empower new regulators to police an already heavily regulated industry, but it insulates the bureaucrats from congressional oversight. A number of states have sued, calling the law unconstitutional.
As for how the middle class is faring, The Wall Street Journal provides some useful statistics. The bottom 60 percent of American income earners were worse off in 2011 than in 2007. Two years after the official end of the recession, middle-class Americans got more government checks than they had in the previous decade (transfer payments were up 25.9 percent over 2007), but after-tax income fell by 1.9 percent.
There are other ways to examine the record: Poverty has hit a 50-year high. The wealthiest 10 percent saw incomes rise during the Obama years, while everyone else’s incomes declined or remained stagnant. With interest rates effectively at zero, capital searched for higher returns and found them in the stock market. Income inequality, that great bugbear of the Democratic left, has increased, not decreased, under Obama’s policies.
Dodd-Frank is the poor stepchild of Obama-era enactments, receiving far less attention than Obamacare, but its contribution to the stagnant economy deserves more recognition. The Federal Reserve Act of 1913 was 31 pages long. Dodd-Frank weighs in at 2,300 pages, not counting 13,789 pages of regulations as of 2013. Here is how a defender of the law described it: “Sure, Dodd-Frank is a mess; sure, the statute is unwieldy and inefficient; sure, the statute takes power away from citizens and states and transfers it to the federal government. However, it’s not unconstitutional or otherwise illegal for Congress to pass a bad law. And this is what Dodd-Frank is.” Remind me never to ask Jonathan Macey, of Yale Law School, for a testimonial.
While big Wall Street houses can tolerate the added burdens of Dodd-Frank without breaking a sweat, smaller banks, like the ones that routinely issue personal and business loans, are being squeezed. A study by the Mercatus Center found that 83 percent of small banks reported that their compliance costs had increased by more than 5 percent. Most planned to hire more compliance staff and cut back on mortgages, home equity lines of credit and other services in order to cover those costs. Employment at small and medium-sized banks has been slow or negative, while large banks have seen robust growth.
Obama mocked concerns about regulation, but his embrace of it has successfully put sticks into the spokes of the economic wheel. The price, Democratic talking points notwithstanding, is being paid by the poor and the middle class.
By Mona Charen
During the 2012 campaign, President Obama often resorted to his favorite substitute for thinking: ridicule. Before enthusiastic audiences (who were assured his reelection would spell a thriving economy and a revived middle class), the president would mock Republicans by suggesting that “they have the same prescription they’ve had for the past 30 years. … Take two tax cuts, roll back some regulations, and call us in the morning.”
Obama’s prescription, which we are now in a position to evaluate for effectiveness, was the most massive increase in regulation of modern times. There is no industry or economic sector that the Democratic Party does not believe would benefit from badgering interference from Washington. Adding insult, every new regulation is trussed up and presented as “being on the side of the middle class.”
Sometimes, as in the case of Obamacare, that required lying to voters about what the law contained. In the case of Dodd-Frank, it required insulating regulators from democratic accountability. The Consumer Financial Protection Bureau, a creature of Dodd-Frank, is not even funded by our elected representatives, but instead gets financed directly from the Federal Reserve. Translation: If the “middle class” ever decides that Congress should relieve it of the CFPB’s ministrations, they will be unable to exert any influence. Like HAL in the movie “2001: A Space Odyssey,” the CFPB has a life of its own.
It’s odd that Democrats are so rarely challenged on their claim to speak for the broad middle class, because the story of Democratic policy over the course of the past century has been to withdraw more and more power from ordinary people and place it in the hands of the unelected. They’ve succeeded very well with the judiciary and with federal agencies. Dodd-Frank, however, marks a new milestone. Not only does it empower new regulators to police an already heavily regulated industry, but it insulates the bureaucrats from congressional oversight. A number of states have sued, calling the law unconstitutional.
As for how the middle class is faring, The Wall Street Journal provides some useful statistics. The bottom 60 percent of American income earners were worse off in 2011 than in 2007. Two years after the official end of the recession, middle-class Americans got more government checks than they had in the previous decade (transfer payments were up 25.9 percent over 2007), but after-tax income fell by 1.9 percent.
There are other ways to examine the record: Poverty has hit a 50-year high. The wealthiest 10 percent saw incomes rise during the Obama years, while everyone else’s incomes declined or remained stagnant. With interest rates effectively at zero, capital searched for higher returns and found them in the stock market. Income inequality, that great bugbear of the Democratic left, has increased, not decreased, under Obama’s policies.
Dodd-Frank is the poor stepchild of Obama-era enactments, receiving far less attention than Obamacare, but its contribution to the stagnant economy deserves more recognition. The Federal Reserve Act of 1913 was 31 pages long. Dodd-Frank weighs in at 2,300 pages, not counting 13,789 pages of regulations as of 2013. Here is how a defender of the law described it: “Sure, Dodd-Frank is a mess; sure, the statute is unwieldy and inefficient; sure, the statute takes power away from citizens and states and transfers it to the federal government. However, it’s not unconstitutional or otherwise illegal for Congress to pass a bad law. And this is what Dodd-Frank is.” Remind me never to ask Jonathan Macey, of Yale Law School, for a testimonial.
While big Wall Street houses can tolerate the added burdens of Dodd-Frank without breaking a sweat, smaller banks, like the ones that routinely issue personal and business loans, are being squeezed. A study by the Mercatus Center found that 83 percent of small banks reported that their compliance costs had increased by more than 5 percent. Most planned to hire more compliance staff and cut back on mortgages, home equity lines of credit and other services in order to cover those costs. Employment at small and medium-sized banks has been slow or negative, while large banks have seen robust growth.
Obama mocked concerns about regulation, but his embrace of it has successfully put sticks into the spokes of the economic wheel. The price, Democratic talking points notwithstanding, is being paid by the poor and the middle class.
By Mona Charen
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Anyone is welcome to use their voice here at FREEDOM OR ANARCHY,Campaign of Conscience.THERE IS NO JUSTICE IN AMERICA FOR THOSE WITH OUT MONEY if you seek real change and the truth the first best way is to use the power of the human voice and unite the world in a common cause our own survival I believe that to meet the challenges of our times, human beings will have to develop a greater sense of universal responsibility. Each of us must learn to work not just for oneself, ones own family or ones nation, but for the benefit of all humankind. Universal responsibility is the key to human survival. It is the best foundation for world peace,“Never be afraid to raise your voice for honesty and truth and compassion against injustice and lying and greed. If people all over the world...would do this, it would change the earth.” Love and Peace to you all stand free and your ground feed another if you can let us the free call it LAWFUL REBELLION standing for what is right