The CFPA and the burning of the Constitution

Yesterday, Congress passed a bill creating the Consumer Financial Protection Agency (CFPA). This agency will have BROAD authority over financial products in the United States. President Obama's administration, who proposed this Agency, alluded to the purpose of the CFPA being nothing more than a safeguard against financial institutions taking advantage of consumers.

This is complete bullcrap.

Throughout modern history, agencies in the United States have usurped the Constitutionally-given powers of the Legislature and (more importantly) the individual states to oversee commerce, resource usage, and revenue generation (instead of 'taxes' the agencies use 'fines' and 'licenses').

Before we get into the terror that the CFPA will most definitely become, lets journey back through the creation of some other unconstitutional agencies that currently run these United States.

Environmental Protection Agency (EPA)

We all know this one, right? December 2, 1970 was a dark day in American history. The EPA officially came into existence, and mass government regulation of business began. Anything involving water, air, or earth became their domain to oversee, regulate, fine, and disband. Well, everything except Monsanto Corporation, who pretty much owns the EPA.

Every manufacturer that produces waste (so, that would be just about all manufacturers I can think of) has to deal with the EPA at one time or another. The fines and licensing requirements placed on manufacturers by the EPA increase the base cost of all goods produced, thus creating less demand (due to price), and the result of that is less jobs.

The recent CO2 regulation news is yet another nail in the coffin of the free markets...

FEDERAL RESERVE (The Fed)

'Born' in 1913 due to numerous bank failures due to panic/bank runs by depositors, the Federal Reserve was initially formed to provide a form of depositor's insurance and to assist in the policing of banking standards. Since then, the Fed has assumed so much control over our nation's currency (inflation regulation, proposing 'stimulus' packages, etc) that the market can barely operate on a daily basis without some type of input from them.

Funny thing is, banks still fail at a steady rate. So, what exactly has the Fed accomplished?

OTHER AGENCIES

I can go on and on about other agencies (FTC, FAA, FDA, etc), but I don't have the time and neither do you. Suffice it to say that these agencies are:

1. NON-ELECTED OFFICIALS
2. GIVEN THE POWER TO GENERATE REVENUE
3. HAVE THE ABILITY TO STRIP A CITIZEN OF HIS/HER FREEDOM
4. HAVE VIRTUALLY NO OVERSIGHT

SO, BACK TO THE CFPA

Now, the CFPA will have the power to do such things as:

1. Decide what financial products will be available to consumers. What does this mean? It means that the government will tell financial institutions what kind of loans they may issue, and at what interest rates.
--The Negative-- Lenders operate by getting investors to front money to be loaned, at a rate of interest, to people who request it for specific or general purposes. Investors have the right to decide on the return on their investment, which influences the interest rate. This is the enticement that lenders use to get investors. By federalizing the lending institution, less investors will want to front money to the financial institutions (because their chance for decent returns will be lessened), and as such less lending will be available.
--The Scary--Once less investors begin investing, I predict the CFPA will then request Congress to pass a bill to use tax revenue for funding these now-underfunded loan programs. At that point, the balance of power shifts yet again from the citizenry to the federal minority.

2. Levy fines against financial institutions for not living up to the government-approved standards. Instead of letting the market decide what is a good product and what is a bad one, now a FEW PEOPLE in the government (who, as we learned earlier, are not even elected officials) will decide what is right and what is wrong.
--The Negative--Fines generate revenue, so it is beneficial to the Agency to show 'progress' and justify its existence by issuing fines. Fines by the CFPA, like the FDA, EPA, and other A's, will be cumbersome almost to the point of back-breaking...but not quite. That way, they can continue to do it without appearing to destroy the industry overnight (instead, it will take decades).
--The Scary--The power to wield so much moral power by just a few unelected officials (including a 'czar' which will oversee the agency) is worrisome. These folks have virtually NO oversight, and as such can insert their personal feelings into how things are done at a level beyond normalcy. The lack of checks and balances leaves too much to individual interpretation.

3. Require even more licensing and regulatory inspections. While licensing and regulatory inspections put an obvious impact on the financial institutions, it also creates more bureaucracy. That means more costs (salaries, equipment, travel, etc).
--The Negative-- Licensing raises prices as well as lowers potential workers/businesses. Long, drawn-out processes benefit companies that lobby and can chase smaller businesses out of the industry. I can go on and on about the negatives here.
--The Scary-- Almost total money market control by the Federal government. Between the Fed, the CFPA, EPA, and other agencies, we are stepping into a public sector-heavy economy, instead of a private sector-driven one.


CONCLUSION

I can go on and on about the evils of more government agencies. Instead, I will sum up the points of this discussion with the following:

1. Government Agencies, like the EPA and CFPA, are NON-ELECTED BODIES that are given the power to levy fines and charge for licensing (aka taxes) without the consent of the people.

2. Government Agencies have no direct oversight, other than an appointed (not elected) 'czar'. This leaves too much room for a small body of people to exert their personal beliefs onto the masses.

3. Government Agencies reduce the natural ebb and flow of a free market by over-regulating. By doing this, businesses that SHOULD fail do not (kept on life support by the government, just like these stimulus and bailout programs currently in force). This lowers the quality of financial products available.

4. Government Agencies create more debt by increasing the size of the bureaucracy. The revenue they generate raises prices on consumer products, and reduce the amount of available jobs. Overall, that means more taxes and less available money in the free market.

5. Government interference in the products offered by lending institutions will stifle the interest of investors.