Something happened this week to cause me to step back and ask myself the following question: Have we just witnessed catastrophic failure that was allowed to occur because of a lack of Federal regulation, or a failure to enforce that which already exists in law?
It seems that every time some disaster or major failure occurs in America, the cry goes up from our Government, saying “We need more regulatory authority!” Before you decide Americans should support adding more regulation, let’s review recent events.
The triggering event for my asking the question in the first place was the BP oil leak disaster in the Gulf of Mexico. While all the facts are not yet known, it appears the U.S. Mining and Minerals Service (MMS) of the United States Government already had the authority and the responsibility to directly regulate what BP could do and not do on the oil rig. Also, they were supposed to have the materials and equipment in place to quickly implement the approved oil spill clean-up plan prepared by BP and approved by the government several years ago. Instead of enforcing existing regulations and actually performing periodic inspections, early information indicates MMS instead “waived” these inspections. News reports also indicate MMS regulators were involved in accepting gifts and travel from the very companies they were supposed to regulate, and spending some of their time watching porn on their U.S. Government PCs instead of regulating. So … do we really need more regulation?? Or do we just need a competent group of regulators to enforce what authority they already have?
Thinking about that question also reminded me of the current debate in Congress on new regulations for the financial services industry. Many in Congress blame greedy Wall Street executives for the mortgage meltdown and stock market crash. Yet, it was Congress itself that pushed banks to meet “moderate and low income home ownership” targets or be punished. Then Fannie Mae and Freddie Mac, under direct U.S. Government regulation, acted as “off-the-books” federal treasuries to repackage these home loans and sell them to investors. Political buddies like Franklin Raines and other “Friends of Bill” were given jobs at Fannie and Freddie, where lending standards were weakened to achieve “affordable housing” regulations. It was the Federal Reserve that kept interest rates so low that people were encouraged to purchase larger homes beyond what many could really afford. None of the regulators stopped the ridiculous “no documentation required” loans being made, even though the taxpayers would eventually be on the hook if home buyers got into trouble. Attempts to stop the problems at Fannie and Freddie by the last Administration were squashed by powerful Democrat congressional committee chairmen (some of whom are still in those leadership roles). Bumbling Federal regulators who were supposed to oversee the banks as well as Fannie, Freddie and Wall Street were also blind to the outrageous activities of Bernie Madoff, the investment manager who scammed investors of about $30-50 Billion despite repeated warnings and accusations from private individuals like Harry Markopolis in New York. The regulators couldn’t even perform simple investment transaction confirmations which would have quickly detected the fraud years ago. So let me ask you again … do we really need more regulation? Or do we just need a competent group of regulators to enforce what authority they already have?
Now let’s consider one more recent event – – the tragic mining accident in the Upper Big Branch mine run by Massey Corporation in West Virginia. Just prior to the event, the U.S. Mining Safety and Health Administration (MSHA) inspectors had no outstanding safety issues requiring corrective action, and they were actually going to award the mine a safety award! In 2009, more than 500 citations had been given to the Upper Branch mine and fixed. Any serious violations would have allowed the MSHA to shut down the mine until corrected. This didn’t happen. So let me ask one more time … do we really need more Federal regulation? Or just a competent group of regulators to enforce what authority they already have?
I think one can conclude from all of this that we don’t have a lack of regulation and we don’t need more regulation. We need accountability within the Federal government to get rid of those not doing their jobs. Giving the Federal government more regulatory authority, whether it is in the banking industry, cap and trade, health care, or mining industries will only lead to excessive regulation, greater invasion of our privacy, bloated government, and higher taxes. We have to stop this mantra of “My agency needs more people, more budget, more power” in the Federal government. We just need good people to do what they are already paid to do.