by Luke De Boer on Thursday, September 3, 2009 at 6:07pm
In light of the recent Van Jones controversy and his comment of, "How has that capitalism worked out for ya this year?", I have decided on a topic for my next note. What I am about to write goes against everything we have heard regarding the cause of the financial meltdown in the fall of 2008. The idea that the financial meltdown was caused by some sort of massive "deregulation" is a lie.
This past year we have heard from politicians and the media that it was GW's laissez-faire policies that got us into this mess. Here is a quote from Joe Biden, "...If you need anymore proof positive of how bad the economic theories have been, this excessive deregulation, the failure to oversee what was going on, letting Wall Street run wild, I do not think you needed anymore evidence than what you see now..." -Joe Biden, Vice Presidential debate 10/2/2008. Or perhaps our president, "The biggest problem in this whole process was the deregulation of the financial system,"*.
It's really not that difficult to recognize the irrationality of the claim. All one would have to do is look at the premise of the claim. During Bush's time as president, did our financial system really go through a massive overhaul in which every area was meticulously deregulated? Were we living in the financial equivalent of the wild west from 2000-2008?
I have compiled the following list of agencies, offices, laws, regulations, etc. that were either in place during the Bush years or were put in place during the Bush years. Forgive me for the dryness of the following list, it's not exactly exciting literature.
1. Bureau of Public Debt
2. Community Development Financial Institution Fund
a. 1994
b. Since creation it claims it is responsible for providing directly and indirectly almost $17 billion to community development organizations and financial institutions to provide credit, capital, and financial services to underserved populations and communities in the U.S.
3. The Financial Crimes Enforcement Network (1990, broadened powers in 1994, broadened again in 2001)
4. The Bureau of Financial Management Service (1984)
5. Inspector General (1989)
a. As recently as 2004 the OIG had a budget of over $13 million and a full time staff of over 100 employees
6. The Treasury Inspector General for Tax Administration
a. Established in 1998 under the IRS Restructuring and Reform Act of 1998
7. Internal Revenue Service
a. Overhauled in 1998
8. Office of the Comptroller of the Currency
a. Charters, regulates, and supervises all national banks
9. FDIC
10. Office of Domestic Finance
a. Develops policies….in the areas of financial institutions…financial regulation, and capital markets
b. Sub-offices in this department include The Office of Financial Markets, The Office of Financial Institutions, and The Office of Fiscal Service
11. Office of Economic Policy
12. Office of General Counsel
a. A sub office of the US Treasury
b. Provides Legal and policy advice
13. Office of Tax Policy
14. Office of Terrorism and Financial Intelligence
15. The U.S. Treasury
16. The Federal Reserve
17. FBI
a. Namely an entire department dedicated to White Collar Crime
18. The Securities and Exchange Commission
a. Stated mission of “Protecting Investors”
b. 19 Sub Offices devoted to regulating various areas of the economy
c. 4 Divisions
i. Division of Corporate Finance
ii. Division of Enforcement
iii. Division of Investment Management
iv. Division of Trading and Markets
d. From 2001-2008 the SEC had 243 new or revised final rules for regulating the financial industry
e. The most recent 2 year budget had expenses of over $900 million
19. Investment Advisers Act of 2006
20. Investment Company Act of 2007
21. U.S. Commodity Futures Trading Commission
a. Recently expanded in 2000 by the Commodity Futures Modernization Act of 2000
22. National Labor Relations Board
23. Federal Trade Commission
a. 12 Sub Offices
24. Sarbanes-Oxley
This is just what I could find in an afternoon of research. This list also only includes federal agencies, offices, laws, etc., I haven't even begun to look into all the various state laws, regulations, offices, & agencies. By the looks of it the financial industry as a whole was hardly running free.
If that list weren't enough we could examine the budget of the SEC (the federal gov't agency responsible for regulating the securities industry) to see if Bush was responsible for slashing financial overview.
Courtesy of Mises.org
The following is the annualized growth rates of the SEC budget under recent presidents. (Below is a chart of the growth)
Jimmy Carter: 9.3%
Ronald Reagan: 7.5%
George H.W. Bush: 15.3%
Bill Clinton: 6.8%
George W. Bush: 11.3%
I also searched for this supposed deregulation. I could find nothing of the sort. I have challenged liberal friends and acquaintances to show me examples of it but I have yet to be presented with anything outside of conspiratorial conjecture.
When we look at this can we honestly say to ourselves that we have been living with a free market financial sector? So thus we have a contradiction. We are told that it is deregulation's fault that we are where we are. And yet we can clearly see that there was, in fact, no deregulation (in fact, conversely there was increased regulation). Check the premise, something is wrong here. I either made up that list and those numbers or we have been lied to.
*http://www.cnn.com/2008/POLITICS/10/07/presidential.debate.transcript/
This past year we have heard from politicians and the media that it was GW's laissez-faire policies that got us into this mess. Here is a quote from Joe Biden, "...If you need anymore proof positive of how bad the economic theories have been, this excessive deregulation, the failure to oversee what was going on, letting Wall Street run wild, I do not think you needed anymore evidence than what you see now..." -Joe Biden, Vice Presidential debate 10/2/2008. Or perhaps our president, "The biggest problem in this whole process was the deregulation of the financial system,"*.
It's really not that difficult to recognize the irrationality of the claim. All one would have to do is look at the premise of the claim. During Bush's time as president, did our financial system really go through a massive overhaul in which every area was meticulously deregulated? Were we living in the financial equivalent of the wild west from 2000-2008?
I have compiled the following list of agencies, offices, laws, regulations, etc. that were either in place during the Bush years or were put in place during the Bush years. Forgive me for the dryness of the following list, it's not exactly exciting literature.
1. Bureau of Public Debt
2. Community Development Financial Institution Fund
a. 1994
b. Since creation it claims it is responsible for providing directly and indirectly almost $17 billion to community development organizations and financial institutions to provide credit, capital, and financial services to underserved populations and communities in the U.S.
3. The Financial Crimes Enforcement Network (1990, broadened powers in 1994, broadened again in 2001)
4. The Bureau of Financial Management Service (1984)
5. Inspector General (1989)
a. As recently as 2004 the OIG had a budget of over $13 million and a full time staff of over 100 employees
6. The Treasury Inspector General for Tax Administration
a. Established in 1998 under the IRS Restructuring and Reform Act of 1998
7. Internal Revenue Service
a. Overhauled in 1998
8. Office of the Comptroller of the Currency
a. Charters, regulates, and supervises all national banks
9. FDIC
10. Office of Domestic Finance
a. Develops policies….in the areas of financial institutions…financial regulation, and capital markets
b. Sub-offices in this department include The Office of Financial Markets, The Office of Financial Institutions, and The Office of Fiscal Service
11. Office of Economic Policy
12. Office of General Counsel
a. A sub office of the US Treasury
b. Provides Legal and policy advice
13. Office of Tax Policy
14. Office of Terrorism and Financial Intelligence
15. The U.S. Treasury
16. The Federal Reserve
17. FBI
a. Namely an entire department dedicated to White Collar Crime
18. The Securities and Exchange Commission
a. Stated mission of “Protecting Investors”
b. 19 Sub Offices devoted to regulating various areas of the economy
c. 4 Divisions
i. Division of Corporate Finance
ii. Division of Enforcement
iii. Division of Investment Management
iv. Division of Trading and Markets
d. From 2001-2008 the SEC had 243 new or revised final rules for regulating the financial industry
e. The most recent 2 year budget had expenses of over $900 million
19. Investment Advisers Act of 2006
20. Investment Company Act of 2007
21. U.S. Commodity Futures Trading Commission
a. Recently expanded in 2000 by the Commodity Futures Modernization Act of 2000
22. National Labor Relations Board
23. Federal Trade Commission
a. 12 Sub Offices
24. Sarbanes-Oxley
This is just what I could find in an afternoon of research. This list also only includes federal agencies, offices, laws, etc., I haven't even begun to look into all the various state laws, regulations, offices, & agencies. By the looks of it the financial industry as a whole was hardly running free.
If that list weren't enough we could examine the budget of the SEC (the federal gov't agency responsible for regulating the securities industry) to see if Bush was responsible for slashing financial overview.
Courtesy of Mises.org
The following is the annualized growth rates of the SEC budget under recent presidents. (Below is a chart of the growth)
Jimmy Carter: 9.3%
Ronald Reagan: 7.5%
George H.W. Bush: 15.3%
Bill Clinton: 6.8%
George W. Bush: 11.3%
I also searched for this supposed deregulation. I could find nothing of the sort. I have challenged liberal friends and acquaintances to show me examples of it but I have yet to be presented with anything outside of conspiratorial conjecture.
When we look at this can we honestly say to ourselves that we have been living with a free market financial sector? So thus we have a contradiction. We are told that it is deregulation's fault that we are where we are. And yet we can clearly see that there was, in fact, no deregulation (in fact, conversely there was increased regulation). Check the premise, something is wrong here. I either made up that list and those numbers or we have been lied to.
*http://www.cnn.com/2008/POLITICS/10/07/presidential.debate.transcript/
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