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Tuesday, September 15, 2009
Let me get this straight.
There are two regulatory agencies overseeing stock and futures trading: the Securities and Exchange Commission, created in 1934, and the Commodity Futures Trading Commission, created in 1974.
Are you with me so far?
A year after the financial crisis, as lawmakers are trying to come up with ways to reform the financial sector, it has been proposed that these two agencies be combined into a single entity.
Republicans think this is a great idea.
Democrats think this is a great idea.
The SEC and CFTC both think this is a great idea.
But it will never happen, because it's politically impossible.
How can that be? Quite simply, it's impossible to get a committee chairman in Congress to give up power. If the two agencies were combined, the CFTC would no longer fall under the purview of the Agriculture committee, and that chairman would lose power in the form of lobbyist attention and special interest donations, among other things. Apparently, this is such a distasteful thing for a committee chairman to have to endure that they are able to marshal incredible forces to keep it from happening.
And so it can never happen. Even though virtually everyone else in the federal government thinks it would be a great idea.
It makes me wonder why we even bother evaluating the strengths and weaknesses of the arguments for the various positions on all the pressing issues before Congress, when in the final analysis, whether or not good policy is enacted depends on entirely on something so stupid as one committee chairman's self-interest.
