The Republicans have opened another front in their neverending war against regulations, those tools that help government protect us from greedy corporations. Leading the charge once again is Sen. Richard Shelby, the willing servant of Wall Street who weakened the regulations in Dodd/Frank during negotiations with Sen. Dodd … and then refused to vote for it anyway.
After that little bit of procedural treachery, Sen. Shelby attacked the Consumer Financial Protection Bureau (Protect consumers? How dare they?) with outright falsehoods about the extent of that organization’s power.
Now Shelby’s fighting urgently-needed regulations by proposing something called the “Financial Regulatory Responsibility Act.” It would, according to the Senator, “determine the economic impacts of proposed rulemakings, including their effects on growth and net job creation.”
Sen. Shelby added: “My colleagues and I are simply proposing that each financial regulator determine whether the economic cost of a new regulation exceeds its economic benefit. If it does, then the regulation should not be implemented.”
Here’s where you’re probably expecting a hostile comment about the Senator’s proposal. Forget it. I think it’s a great idea … one one condition: The bill should be revised so that every politician who proposes de-regulating an industry, and every regulator who fails to use their powers properly, must be held to the same standard. They must first “determine the economic impact of the proposed deregulation, including its effects on growth and net job creation.”
How have the deregulators performed so far? Let’s look at the record:
The Republicans, aided by business-friendly Democrats, deregulated Wall Street in the nineties. Their actions in overturning Glass-Steagall and removing other protections led directly to the financial collapse of 2008. How did that affect growth and jobs?
* 20 million jobs lost worldwide
* 8 million jobs lost in the United States
* $100,000 in lost asset value for the typical American household
The GOP’s right to emphasize jobs. They’re our most urgent priority right now, thanks to the crisis caused by deregulation. (They’re also a key topic in next week’s Take Back the American Dream conference.)
But the Republicans who are now fighting to overturn Dodd/Frank should be required to honestly estimate the cost in jobs and growth if they’re successful in their efforts. Republicans and Democrats who are resisting the breakup of too-big-to-fail banks or the full enactment of the Volcker rule should also be required to estimate the potential costs of their actions.
And the financial sector isn’t the only industry they’ve been deregulating. How have they done in energy, for example? Lousiana Governor Bobby Jindal likes to say that the partial moratorium on deep-water drilling could cost his state 20,000 jobs. Oil companies like BP were allowed to “self-regulate” – which is to say, they were unregulated – based on arguments like Gov. Jindal’s.
How much has the oil industry’s “self-regulated” deepwater drilling cost the Gulf? BP alone is likely to spend more than $40 billion in claims, fines, and other expenses. Local businesses have lost anywhere from $4 billion to $12 billion in lost income. 29% of people with plans to visit Louisiana cancelled them after the spill, according to the Natural Resources Defense Council.
The NRDC added that “the Gulf of Mexico saw a 39 percent decline in commercial fishing landings overall between 2009 and 2010. This represents a $62 million loss in dockside sales.” According to the NRDC, “The Gulf Coast Claims Facility paid 174,172 claims to individuals and businesses who have suffered damages and costs related to the spill.”
Anybody who proposes deregulation in the future (sorry, I meant “self-regulation”) should be required to let the public know just how much money it could cost, how many jobs might be lost, and how much of our nation’s beauty and other priceless treasures might scarred or destroyed.
To be fair and balanced, let’s look at the upside of deregulation. Has it created any jobs to make up for the millions it destroyed, as its supporters have promised? The Bush Administration aggressively cut regulations and appointed regulators who were industry-friendly and lax on enforcement. The result? Even before the deregulation-caused crisis, the Bush years were the worst extended period of job growth in this country since World War II. They also marked the first decline in median household incomes since the Census Bureau began tracking that information in 1967.
So a fair and balanced version of the Shelby bill would have warned the public that the last ten years of deregulation were going to cost millions of jobs and trillions in wealth. And in return, deregulation was going to produce … well, nothing.
Yep. The more I think about Sen. Shelby’s idea, the more I like it – with this little modification, of course. An honest assessment of the way that regulation affects jobs and growth, compared with the effects of deregulation, will conclusively prove that the only way to put America back to work is by putting regulations back to work for us.
The only problem is the name of the bill. The old one, the “Financial Regulatory Responsibility Act,” just doesn’t fit anymore. Maybe we could call it the “Deregulatory Responsibility Act.” Or the “Deregulatory Irresponsibility Act.” Or the “Think Before Your Act Act.”
But whatever we call it, politicos like Richard Shelby should be forced to tell the truth the next time they claim they have an idea that will “protect jobs.” And if the real motivation for a bill like this one is just to make it harder to protect the American people …. well, they should be forced to disclose that, too.