Tuesday, January 10, 2012
Let's set aside the back-and-forth over the recess appointment of
Richard Cordray as chief watchdog at the new Consumer Financial Protection
Bureau. President Obama named the former Ohio attorney general to lead the
agency when the Senate was supposedly out of session, which he's allowed to
Republicans refuse to confirm him without changes that would render
the bureau toothless. And they hold that the Senate wasn't out of session
because they had someone whack the gavel every four days, calling the empty
chamber to order. Democrats tried the same trick during the George W. Bush
administration. The Constitution neglected to define "recess," so the courts
The bigger question is why Republicans oppose an agency that would
stop financial companies from cheating and taking advantage of ordinary
Americans, which happened to millions during the mortgage mania. They
complain that the current setup leaves the bureau "unaccountable" to the
American people, in part, because its funding comes automatically out of the
Federal Reserve's budget rather than through the congressional
Unfortunately, the interests of the American people and individual
members of Congress are not always one and the same. The funding mechanism
was created precisely to remove the power of the purse from the industry's
handmaidens in Congress. During 2007 and 2008, the height of Wall Street
excess, conservatives cut the funding for the Securities and Exchange
Commission, whose job it was to patrol the markets. They apparently want the
ability to deny the Consumer Financial Protection Bureau the means to stand
between the unscrupulous financial salesmen and their unsophisticated prey.
Sen. Richard Shelby, the Alabama Republican, further warned that the
bureau "will directly affect every American household by limiting their
choices when purchasing financial products, restricting the availability of
credit to consumers" and so forth.
Limit consumer choice? Restrict the availability of credit? Jolly
good, I say. If taking poison off the shelves means limiting consumer
choice, that's OK. And if some people can't get a loan under reasonable
standards, so be it. And really, how does requiring that financial contracts
be written in plain English challenge the sanctity of free markets?
There is a moral case for protecting ordinary folk from abusive or
fraudulent financial products, but also a selfish one. We who were not
foolish, lazy or reckless during the housing bubble also paid a price. When
the slick operators' practices brought the financial markets to their knees,
the taxpayers had to bail them out or face another Great Depression. They
continue to suffer from the Great Recession that followed. (The operators,
meanwhile, ran off with their sacks of upfront fees and the pickings from
We don't want that to happen again, do we? One may argue with reason
that other factors also crushed the financial markets -- government
guarantees for risky mortgages, shoddy and corrupt work by the financial
ratings agencies and a policy of low interest rates to keep the game going.
But a well-built jetliner has any number of backups ready to keep the thing
flying should one system malfunction.
Obviously, there's lots of money in letting Wall Street feed the
little guys into the grinder. The financial, insurance and real estate
industries have given Washington politicians $135 million in 2011-2012,
according to the Center for Responsive Politics. Republicans received 56.3
percent of that largesse, versus 37.7 percent going to Democrats.
While many of the contributors are fine, upstanding citizens, one
still senses a monetary motive behind the Republican campaign to defang the
Consumer Financial Protection Bureau. In the end, the Republican position
would seem more aimed at defending the cons than the Constitution.
COPYRIGHT 2012 THE PROVIDENCE JOURNAL CO.
DISTRIBUTED BY CREATORS.COM
See Other Political Commentary.
See Other Commentaries by Froma Harrop.
Views expressed in this column are those of the author, not those of Rasmussen Reports. Comments about this content should be directed to the author or syndicate.
Rasmussen Reports is a media company specializing in the collection, publication and distribution of public opinion information.
We conduct public opinion polls on a variety of topics to inform our audience on events in the news and other topics of interest. To ensure editorial control and independence, we pay for the polls ourselves and generate revenue through the sale of subscriptions, sponsorships, and advertising. Nightly polling on politics, business and lifestyle topics provides the content to update the Rasmussen Reports web site many times each day. If it's in the news, it's in our polls. Additionally, the data drives a daily update newsletter, the Rasmussen Report on radio and other media outlets.
Some information, including the Rasmussen Reports daily Presidential Tracking Poll and commentaries are available for free to the general public. Subscriptions are available for $3.95 a month or 34.95 a year that provide subscribers with exclusive access to more than 20 stories per week on Election 2012, consumer confidence, and issues that affect us all. For those who are really into the numbers, Platinum Members can review demographic crosstabs and a full history of our data.