The #OccupyWallStreet movement has an agenda and has made it available for all to see. Among their demands is that government eviscerate existing contracts by “eliminating all debt, everywhere.” Imagine there was a government agency with the power to make decisions like that. With a sleight of hand, one person could vitiate contracts and overturn years of business decisions, destroying marketplaces through government intervention. You don’t have to imagine very long. If President Obama and his progressive supporters get their way, the Director of the newly created regulatory agency called the Consumer Financial Protection Bureau (CFPB) will have similar powers.
Created by the flawed Dodd-Frank financial reform legislation, the CFPB Director will be the most powerful regulator in government with little checks and balances from Congress. President Obama said last week that if confirmed, the Director of the Bureau would be able to overturn any private market action it deems abusive. Obama specifically cited the increase in debit card fees as an example of an area where the CFPB could take action to overturn the fee.
Let that sink in for a moment. A legitimate, legal business in America raises its prices by $5 and some bureaucrat would veto it, or worse, punish the business for raising its prices – in order to “make less profit,” as the president said. This is the world Obama and the Democrats seek, a world in which an elite few are empowered to override the marketplace based on their own whims or, in this case, to mollify their voters.
No one likes bank fees, but in a market economy, you could take your money from one bank and move it to another. Avoiding this and keeping you happy is what keeps your bank in line. That’s how the market works, but that’s not good enough in Obama-world. On this fantasy island, the government singlehandedly keeps the electoral mobs happy through the utilization of a financial death squad. It’s government by organized mob.
This case becomes even more ridiculous when you consider the fact that the reason the banks are adding new fees is to cover the cost of a new federal price fixing law that took billions from banks and allocated it to giant retailers like Wal-Mart. And even more absurdly, the pricing fixing law that caused the fee increase is the very same law that created the agency that Obama wants to use to overturn the fee increase.
The near dictatorial power of the CFPB is a result of the combination of a broad mandate and no oversight.
Writing in the American Thinker, George Mason University law professor Michael Krauss noted the CFPB “is insulated from all the traditional checks and balances of government agencies. Its budget, for example, is not dependent on appropriations — it determines how much it needs, and it gets the money directly from the Federal Reserve. The CFPB has no dedicated Inspector General. It has no Commission or Board, and its Chairman is not subject to dismissal at will by the President.” In short, it’s government by dictate.
The potential harms of such an unaccountable agency can easily be understood when you look at the person to whom Obama would like to hand all this power.
Richard Cordray has a history of abusing power. As Attorney General of the state of Ohio, Cordray allowed a series of lawsuits to move forward – some of which were dismissed – that allowed the state Democrat Party to profit. The Wall Street Journal observed that, “Out-of-state plaintiffs’ law firms gave little cash directly to Mr. Cordray’s campaign, but in 2007 and 2008 they contributed $830,000 to the Ohio Democratic Party candidates’ fund, which passed about $2 million to support Mr. Cordray. Mr. Cordray then launched what he called an “aggressive” litigation strategy. Six law firms so far have been retained to represent Ohio pension funds in new lawsuits; five of the firms donated a total of $300,000 to the state Democratic Party candidates’ fund in 2008.” [Wall Street Journal, 2/3/2010, “Trial Lawyers Contribute, Shareholder Suits Follow” By Mark Maremont, Tom McGinty and Nathan Koppel]
It doesn’t take much imagination to see that giving Cordray unchecked power at the CFPB would be a boon for trial lawyers, Occupy Wall Street types and the DNC coffers but be a catastrophe for the economy and average Americans. To think otherwise requires a forced blindness to both Cordray’s past and centuries of evidence against unchecked power.
Senator Sen. Richard Shelby (R-AL) has organized a majority of Republicans to join him and block Cordray–or any nominee–from confirmation until structural reforms are made to the CFPB. But even if they succeed in forcing accountability into this agency, “Pay to Play Cordray” should never be confirmed as it Director.