Don't get me wrong. I'm not opposed to all government regulation. It's a question of how much and what kind. The best type of regulation, in my view, is one that promotes transparency. Security and Exchange Commission regulations that force companies to disclose audited financial information to investors promote good business practices. Rules that require companies to report the salaries, bonuses, and perquisites of top executives provide a check on excessive compensation. Regulations that force lenders to disclose accurate information on the costs of borrowing protect consumers without constricting credit. Requiring that financial institutions keep records and report the complicated derivative instruments they devise and swap makes sense. But empowering government agencies to make decisions on what constitutes too much risk doesn't.
Dodd claims, "The American public expects nothing less of us than to fashion proposals that will minimize great risks to them." But what about the risk of government overreach?
The Obama administration and Democrats in Congress have already revamped the American health system. Now they intend to overhaul the U.S. financial system. Yet few of the people in charge of this massive government intrusion have any experience in the industries they think they know best how to run.
A government that can't even pay its own bills and must borrow against the future earnings of people not yet born seems a bad choice to oversee the financial well-being of the nation.
Linda Chavez is chairman of the Center for Equal Opportunity and author of Betrayal: How Union Bosses Shake Down Their Members and Corrupt American Politics .
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