Do you have any idea how often each of the House and Senate reform bills proposes to solve an intractably complex problem by simply asking the regulators to come up with rules? I don’t, but I found at least 20. Now it all goes to reconciliation, and my suspicion is that that number will not go down and may, indeed, go up when our duly elected representatives throw up their hands, declare victory and make someone else figure it out. Now, Congress asking our regulators to create rules to implement policy is nothing new, and there’s nothing wrong with it, if used sparingly. But this is wholesale delegation of hugely important stuff.
Without clarity around the rules of the game, business will not thrive. I keep coming back to this notion. I run a business, and I need to figure out how financial markets will function coming out of the late unpleasantness. It’s hard enough, but when the rules keep changing, it’s worse.
I can’t tell you how many times I’ve heard our politicos complaining that the financial markets were “Kicking the Can Down the Road” and not dealing with problems. But here’s the biggest can kicking on the planet and it will damage the recovery. Can’t they see that? What makes this worse, is I opened the WSJ last week, and I saw our President in an ass-kicking mood demanding BP pay all idle workers in the Gulf, even if some of those were made idle by the President’s order to stop deepwater drilling. Fine, except for the pesky fact that no law really allows him to do that. Hey, maybe it’s not legal, but it’s the right thing. Oh, sure.
From a financial services perspective, there’s a certain amount of schadenfreude watching someone not in the financial community named the current villain in chief and getting pilloried, but this troubles me. We seem to see this more and more: The use of governmental power in an extra-legal manner to achieve what’s considered by those in power to be a greater good. This mindset will encourage regulatory extravagance and overreaching.
Standby: I think it’s going to be a rough ride getting to workable rules.