When Bureaucrats Fill in the Gaps

Experience in Rhode Island has left me much more sensitive to this dynamic:

In section after section of the massive 1,560-page Senate bill, lawmakers leave much of the details for the regulators to figure out. These are the bank and market overseers — the Federal Reserve, the Office of the Comptroller of the Currency, the Securities and Exchange Commission — who took a beating for not overseeing Wall Street more strictly and for failing to see the danger before it struck in 2008.

Wall Street powerhouses will probably force a more even application of the regulations that bureaucrats build on the law than, say, a local taxpayer group, but this approach to governance is one more way in which we’re handing off our freedoms and right to self governance. State law requires the Division of Municipal Finance to approve tax levies in excess of the tax cap. The law does not, however, have detailed information about time lines and processes, leaving that up to the regulator. For that purpose, the division published regulations that stipulate the following:

3.02 A. No later than fifteen (15) calendar days prior to the adoption of the annual operating budget, a city/town may petition the Department of Administration (Department of Revenue) to override the levy cap in accordance with amended RIGL Section 44-5-2(d)(1) or (3).

As we discovered, in Tiverton, two days before our financial town meeting, the head of Municipal Finance, Susanne Greschner, can undo her organization’s regulations with a last-minute email to the town administrator, having been privately petitioned by influential people in government. While the parallel is not perfect, one suspects that regulators of the financial industry will find cause for similar adjustments on the fly, making capricious the rules that govern our nation. My recollection of government theory is that the entire purpose of regulation is to create a fair and consistent playing field for economic and political action.

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11 years ago

This Dodd bill is the equivalent of Obamacare for the entire financial industry. It is a fascist takeover of control, but not ownership. As we are already seeing the healthcare industry begin to crumble and employers make radical changes in their benefits programs in response to the perverse consequences of Obamacare, watch for serious distortions in banking and investing, together with a flight of jobs and economic activity to offshore markets. And watch for many more fees on your bank accounts and credit cards.
The regime seems to think that people are hostages within the US market and so government can do whatever it wants to them. In reality, anyone with the capacity to make a choice will simply relocate to a more hospitable place, and take their productivity with them.
We in RI have seen this phenomenon many times as businesses leave our corrupt, high-tax straitjacket of a state. It doesn’t take a Houdini to get out.

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