PrintJuly 28, 2010
Transparency for thee but not for me
After signing the recent Dodd-Frank "financial reform" bill that was rammed through Congress, the President said "It will finally bring transparency to the kind of complex and risky transactions that helped trigger the financial crisis". What the bill won't do is bring transparency to the government regulators of the financial markets.
The U.S. Securities and Exchange Commission (SEC) has been exempted from almost all Freedom Of Information (FOI) requests by the "financial reform" bill. This is what the Obama administration means by transparency: A business should record and report every minute detail, save every document, on the other hand the government body that oversees the regulation of business has almost no public accountability at all.
The stunningly bad idea of providing legal cover for a regulating body that has a history of getting it wrong is par for the course when it comes to "financial reform". Remember, this is the same SEC that failed to get Bernie Madoff; does anyone think that exempting them from public disclosures is going to make the institution work any better? The Dodd-Frank bill removes transparency from the regulators at the SEC, making it harder for the public to know if their tax dollars are being spent wisely
This isn't the only bad idea in the 2000 plus page Dodd-Frank monstrosity, but what isn't in the bill is just as disconcerting. The Dodd-Frank bill fails to regulate Fannie Mae and Freddie Mac, the two Government Sponsored Entities that were at the heart of the financial meltdown. Currently Fannie and Freddie have more than $5 trillion in liabilities, and have already cost the US taxpayer $150 billion dollars. The two GSEs (government-sponsored enterprises) have been involved in numerous accounting scandals where investigators found "extensive financial fraud." Yet these two companies are exempt from Dodd-Frank's "financial reform"!
The stunningly bad idea of providing legal cover for a regulating body that has a history of getting it wrong is par for the course when it comes to "financial reform". Remember, this is the same SEC that failed to get Bernie Madoff; does anyone think that exempting them from public disclosures is going to make the institution work any better? The Dodd-Frank bill removes transparency from the regulators at the SEC, making it harder for the public to know if their tax dollars are being spent wisely
This isn't the only bad idea in the 2000 plus page Dodd-Frank monstrosity, but what isn't in the bill is just as disconcerting. The Dodd-Frank bill fails to regulate Fannie Mae and Freddie Mac, the two Government Sponsored Entities that were at the heart of the financial meltdown. Currently Fannie and Freddie have more than $5 trillion in liabilities, and have already cost the US taxpayer $150 billion dollars. The two GSEs (government-sponsored enterprises) have been involved in numerous accounting scandals where investigators found "extensive financial fraud." Yet these two companies are exempt from Dodd-Frank's "financial reform"!
Remember it was these same two GSEs that bundled so many mortgages and sold them to Wall Street. With this history, the Democrats have decided to regulate Wall Street, not Fannie and Freddie. Not surprisingly, Democrats in Congress received a majority of the political contributions from Fannie and Freddie.
Currently Fannie and Freddie are being operated by the federal government and were ordered delisted from the New York Stock Exchange. It's worth reminding Democrats that the only thing that their continued meddling in the market place has wrought is failure. The Dodd-Frank bill protects the politically connected democratic creations of Fannie, Freddie, and the SEC, while providing a public whipping boy in Wall Street. There is no doubt that the Dodd-Frank bill removes transparency from the regulators at the SEC, but it makes transparent the Congressional Democrat's naked political interest and hypocrisy.
Currently Fannie and Freddie are being operated by the federal government and were ordered delisted from the New York Stock Exchange. It's worth reminding Democrats that the only thing that their continued meddling in the market place has wrought is failure. The Dodd-Frank bill protects the politically connected democratic creations of Fannie, Freddie, and the SEC, while providing a public whipping boy in Wall Street. There is no doubt that the Dodd-Frank bill removes transparency from the regulators at the SEC, but it makes transparent the Congressional Democrat's naked political interest and hypocrisy.
Aaron Gee is a US based IT consultant who blogs at www.foundingideals.com.
