A bully agency un­der­lines a Trump chal­lenge

Cecil Whig - - FRONT PAGE - Jay Am­brose

WASHINGTON

— Over­reg­u­la­tion, a worry ex­pressed by Don­ald Trump in the pres­i­den­tial cam­paign, di­min­ishes free­dom and stymies the econ­omy. Pres­i­dent Barack Obama is its champ. A ma­jor vic­tory of his, there­fore, was the hur­riedly, reck­lessly passed Dodd-Frank fi­nan­cial re­form law meant to pre­vent another 2008-style fis­cal cri­sis.

Its fail­ure is too big to ig­nore.

On top of ren­der­ing Wall Street big­gies more vul­ner­a­ble and less pro­duc­tive, en­forcers of the in­ept mish­mash are also mess­ing de­struc­tively with small banks, in ef­fect short­chang­ing their cus­tomers. They are lately go­ing af­ter life in­surance com­pa­nies, too, with rea­sons less than con­vinc­ing.

The in­surance is­sue has re­ceived at­ten­tion in part be­cause MetLife had the nerve to fight back in court against the Fi­nan­cial Sta­bil­ity Over­sight Coun­cil, which de­serves the acro­nym BULLY in­stead of FSOC. This Dod­dFrank cre­ation wants to lump this ma­jor in­surance provider in with big banks be­cause, it says, its col­lapse would have a dev­as­tat­ing im­pact on the fi­nan­cial sys­tem.

BULLY, how­ever, ne­glected to show whether a col­lapse was likely and whether it would have the im­pact it al­leged. The over­bear­ing reg­u­la­tor also failed to as­sess what the costs of its as­sault on MetLife would be.

The pro­ce­dure was against all reg­u­la­tory rules, amount­ing to an ar­bi­trary move that could make the com­pany un­com­pet­i­tive, and U.S. District Judge Rose­mary Col­lyer was not ex­actly pleased. BULLY’s whole process was “fa­tally flawed,” she said in a de­ci­sion fa­vor­ing MetLife. She even pointed to ev­i­dence that MetLife would not dam­age the econ­omy if its own busi­ness-life were sur­pris­ingly ter­mi­nated.

BULLY’s hon­chos won­dered what right a mere court of law had in in­ter­ven­ing with its sacro­sanct, ad­min­is­tra­tives­tate com­mand­ments and sought suc­cor from Washington’s fed­eral ap­peals court. The court held a hear­ing, throw­ing tough ques­tions at both sides even as it is ex­pected to fa­vor BULLY.

In the in­terim, those speak­ing for MetLife have pointed out that life in­surance com­pa­nies are al­ready ca­pa­bly reg­u­lated by the states. It’s true that AIG’s fi­nan­cial di- vi­sion got a fed­eral bailout in the 2008 cri­sis, but its smoothly func­tion­ing in­surance op­er­a­tions were not a prob­lem. MetLife was de­nied the right to ex­am­ine BULLY’s pa­pers on the MetLife review, and one an­a­lyst says in­surance pur­chasers hit with fewer pol­icy choices and higher bills could be the group that ul­ti­mately pays.

All of this is just one re­cent ex­am­ple of how the fed­eral government is ever march­ing for­ward to trans­form Amer­ica into the land of the re­pressed and the home of the bur­dened. The Obama ad­min­is­tra­tion this year passed the all-time pres­i­den­tial record by its ini­ti­a­tions over eight years of more than 600 ma­jor reg­u­la­tions, com­ing at an av­er­age cost each of $1.4 bil­lion, cost­ing the econ­omy $743 bil­lion, or $2,294 per ci­ti­zen. The National As­so­ci­a­tion of Man­u­fac­tur­ers said the Obama la­bor reg­u­la­tions alone would cost $80 bil­lion and 150,000 jobs.

The Wall Street Jour­nal is among those ed­i­to­ri­al­iz­ing that over­reg­u­la­tion is scarcely a neg­li­gi­ble rea­son for the worst eco­nomic re­cov­ery since World War II.

Par­tic­u­larly per­ni­cious: Dodd-Frank, which so con­fused reg­u­la­tors they couldn’t at first fig­ure out how to trans­late its lan­guage into scores of un­be­liev­ably com­pli­cated rules then be­fud­dling the reg­u­lated.

One law pro­fes­sor says their ob­scu­rity has led to “ad hoc in­ter­ven­tions” re­plac­ing rule of law. Banks once too big to fail are now big­ger. Bailouts could ac­tu­ally be more likely. Pol­i­tics have not been in hid­ing.

There are re­vi­sions that could fix Dodd-Frank, and a House com­mit­tee was push­ing some, but good luck with Obama as a pres­i­dent. The thing is, he won’t be an Oval Of­fice res­i­dent much longer, and Hil­lary Clin­ton, who promised to veto any leg­is­la­tion so up­pity as to chal­lenge the act, will not re­place him. Trump? As part of his over­all as­pi­ra­tion to rein in reg­u­la­tion for the econ­omy’s sake, the pres­i­dent-elect said dur­ing the cam­paign he would scale back or flat­ten the law.

So there’s hope, not just for MetLife, but for Amer­i­cans gen­er­ally. Maybe we won’t have a fis­cal cri­sis ac­ci­den­tally forced upon us. Maybe we will pros­per.

Jay Am­brose is an columnist for Tribune News Ser­vice. Read­ers may email him at speak­to­jay@aol.com.

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