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REGULATORY REFORM: THE ANTI ANTI TRUST LAW
By DICK MORRIS & EILEEN MCGANN
DickMorris.com
From Kevin Hassett, writing for
Bloomberg News, comes
the metaphor that aptly explains the consequences of Obama's proposed
regulatory reform law. The law would turn "Goldman Sachs Group and a
few other financial giants into organizations that resemble AT&T in the
1950s," he writes.
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Against this backdrop of public
control of TBTF firms is the obvious fact that, through massive campaign
contributions, these very same firms that are controlled by the bureaucrats
can, in turn, control the bureaucrats through campaign contributions.
By showering candidates with their largesse, they can buy their way out of
the most onerous of regulations and profit enormously from their TBTF
designation.
The losers are small and medium sized businesses which
haven't the government guarantee and must pay more for their capital,
minimizing their profits. Inevitably, the TBTF firms will leverage
their advantage to takeover their smaller rivals and we will end up with a
few large regulated TBTF companies dominating the capital landscape.
When these new giants win, their
gains will largely accrue only to their investors and employees. Their
investment victories are likely to stem from trading profits and not from
underlying investment in the kind of innovative, job creating companies we
need to encourage. Federal regulation will limit their risk-taking and
will starve these new growing firms of capital. But when they lose,
the taxpayer will suffer since we will be asked to bail out or "rescue"
failing firms since they are, after all, too big to fail.
In this zero sum game, the more the
regulators from big government and the bankers from big business win, the
more small firms and individual tax payers lose. This is the Obama
future.
It
is the ultimate myth that this regulatory reform bill was introduced to curb
the abuses of Goldman Sachs. In fact, it was created to enable them.
The day in the dock of the civil lawsuit filed against Goldman by the SEC is
a small price to pay for the ultimate empowerment of a federal guarantee
against losses. If Goldman has to pose as the victim in order to
inherit the market, they are quite willing to do so.
Any impartial examination of this
bill shows how wise Goldman was to be the top donor to Obama and one of the
top contributors to Senator Chris Dodd. This reform measure is their
panacea.
We
hope that Republican Senators act like Republicans and either kill the
regulatory reform or force major changes.