Agency Girl Goes Wild

Elizabeth Warren has literally gone wild. No, she did not strip off her matronly suit on a Girls Gone Wild spring break tour bus. Rather, she appears to be on a mission to strip Congress, small businesses and individual Americans of authority by instituting her own rules for how to play the financial game on both Wall Street and Main Street.

Liberals in the media hail Warren as the “protector of the middle class.” Warren may genuinely care about the middle class. Her own mantra is: “Dang gummit, somebody has got to stand up on behalf of the middle class!” Sadly, she does not understand the free markets that prevent the middle class from slipping into poverty.

She only understands rules. Before teaching law (man’s rules) at Harvard Law School, she taught Sunday school (God’s rules). Warren loves rules so much that the Ten Commandments and the Constitution are not enough for her. She wants more.

Last July, President Obama signed the Dodd-Frank financial-regulatory-reform bill. Among other things, this bill ushered in a new government agency called the Consumer Financial Protection Bureau. The President selected Warren to design this agency since it was her idea in the first place (she wrote an essay in 2007 that planted the idea in his mind.) Then, he named Warren his “assistant” and “special adviser” to Secretary of the Treasury.

Time Magazine reports that big-government advocates like Stephanie Taylor of the Progressive Change Campaign Committee hope that the President will go one step further. Even though “(T)he bureau is still establishing the exact scope of its authority… ,” Time reports, “Taylor’s group is urging Obama to take the provocative step of a recess appointment of Warren during one of the many weeks Congress will be away this summer.”

The Consumer Financial Protection Bureau will open on July 21. The agency cannot formally act or issue rules until it has a director. President Obama has delayed naming Warren to the head of the agency in part because of the heated pressure he has received from Republicans in Congress.

Despite this ambiguity, the agency is already working on projects such as the “Know Before You Owe” campaign to simplify mortgage application paperwork, reports the New York Times.

But, do we really need another government agency with extra-Congressional authority? An agency that wants the Federal Reserve, not Congress, to set its budget? An agency developed by the same woman (Warren) who oversaw the highly-criticized $700 billion financial industry bailout?

Warren defended her new agency to Michael Moore in an interview for the DVD version of his film, “Capitalism: A Love Story,” saying: “You can’t buy a toaster in America that has a 1-in-5 chance of exploding, but you can buy a mortgage that has a 1-in-5 chance of exploding, and they don’t have to tell you about it.”

Does Warren want financial companies to write contracts at a second-grade level because she assumes consumers are too dumb or lazy to read the fine print? She tells Time Magazine that consumers shopping for loans, “… drown in a sea of words that are theoretically disclosures, but they scream, ‘Don’t read me.’”

Mortgage brokers do not go to bed at night dreaming up confusing fine print clauses. Financial companies write lengthy contracts partly to comply with existing regulations and to protect themselves from consumer lawsuits. And Warren wants more bureaucracy?

Since Warren loves to throw out appliance analogies, I’ll throw one back at her: Any legitimate appliance company in America provides its customers with a way to voice concerns and complaints. You can speak with a customer service representative in person or call a customer service line to negotiate a full or partial refund.

But, if you dislike policies from unelected government agencies like Warren’s Rule Warehouse, you don’t have a voice. Ironically, federal agencies fail to adequately protect consumers because they don’t give consumers sufficient and reasonable say in their operation and direction.

When government agencies create rules without proper input from voters and Congress, the rules will likely be anti-capitalist policies that are extremely difficult to overturn.

When Congress acts, you do have a voice because you elect your congresspeople; you can email, Tweet, Facebook or call their offices to complain, and, you can vote them out of office.

This new agency could cost financial institutions devastating amounts of money to restructure and dub down their financial products so that your dog can understand them. These costs will be passed along to the consumer, not to the government. Competition in the private sector will motivate consumer finance companies to improve, not government growth.

Whether the President appoints Warren or not, her wild hand built this house of cards. It is time to reign in agency power under Congress’ legitimate authority.