If You Hate Financial Regulations, You’ll Love This
One of the core conservative beliefs of the Republican Party is to loosen or remove regulations, but a new proposed law by a conservative Senator raises the ante on eliminating regulations by forcing them to receive Congressional approval.
This should make financial industry lobbyists salivate at the proposed law since they easily control Congress via the largest lobbying machine in Washington’s history. How big is the financial services lobby? From 1998 to 2008, they financial industry (banking, insurance, real estate, investment) spent over $5 billion, according to Wall Street Watch. More recent numbers in 2016 show the this same sector spent over $366 million, with the Financial Services Roundtable, one of just dozens of financial lobbyist groups, spending over $4 million alone.
…if you are an average investor, caveat emptor more than ever before in U.S. history.
The new law , the Regulations from the Executive in Need of Scrutiny Act (REINS Act), is being proposed by Senator Mike Lee (R-Utah). Lee claims the law is needed because “the vast majority of federal “laws”—upwards of 95 percent—are not passed by the House and Senate and signed by the president as the Constitution directs; they are imposed unilaterally by unelected Executive Branch bureaucrats.”
The REINS Act would apply to any proposed regulation that impacts the economy by $100 million, although the web site does not specific how this would be measured.
Of course, the Republicans claim regulations harm the economy and stifle business, and this is the cover story commonly used by corporations that don’t want to give the public an even break or have no regard for environmental, wage or safety laws, just to name a few areas of common abuse.
The REINS Act would be especially bad for individual investors since it would roll back all the DOL’s important new fiduciary protections, as well as other initiatives taken by the new Consumer Financial Protection Bureau and Senator Elizabeth Warren (D-Mass.). Worse, it would allow the uninformed in
Congress to rule on very detailed and specific proposed regulations that are easily beyond the expertise of Congress, which spends most of its time chasing campaign contributions.
The anti-regulation theme is an essential part of the Libertarian and neoconservatives policies advocated by the Trump administration and ultra-conservatives like Lee, whose web site say: “it is important to oppose the policies of an overreaching and unsustainable federal government.” Of course he puts the positive spin on this by saying “In a free and civil society, your success depends on how well you serve others.”
But, he then contradicts himself when he also says: “In a society dependent on big government, success is determined by how many votes you can buy with other people’s money.” Lee must have forgotten that state legislatures can be more easily bought by lobbyists than the U.S. Congress and that the lobbyists already thrive in “big government” and small government at the state level.
While Lee’s proposal may not go anywhere, it shows the new political theme that will victimize the average investor and citizen when any form of regulation will be vigorously opposed by the new Trump administration. So if you are an average investor, caveat emptor more than ever before in U.S. history.