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Consumer Rescue, or Power Grab?

This morning we learn that the Obama Administration is considering the creation of a new regulatory commission to look out for consumers . Our Readers Who Comment think it's either a Great Idea or another Big Government Power Grab.

As Zachary A. Goldfarb, Binyamin Appelbaum and David Cho write, this agency "could be granted broad powers to make sure the terms and marketing of a wide range of loans and other financial products are in the interests of ordinary consumers." The underlying rationale is a concern that consumer protection might be at the bottom of the priority list for existing regulatory agencies. Why would anyone think that?

There is an obvious political split in the comments between those who think something new should be done and those who think existing agencies should be fixed or that there is already too much government. There is also an amusing sub-discussion on what Teddy Roosevelt would have done. I love our readers.

We'll start with ooyah32, who wrote, "...What the headline and lead should be for this story is what it should be for most everything Obama is doing --
Obama Administration Makes Another Big Power Grab
This isn't about protecting consumers. This isn't about financial watchdogs. This is power-grabbing thuggery, plain and simple."

But dhampton100 said, "Without massive re-regulations and intensive enforcement I do not see anybody playing fair in the business area. These people have proven, beyond any shadow of a doubt, that when they see an opening they are going through it and ripping the consumer off for as much as they can..."

vgailitis wrote, "We have the SEC, FRB and each state its own regulatory bodies. What Obama is doing is creating the Kremlin! Your rights and civil liberties are evaporating under your liberal noses!"

But peterroach said, "On the face of it, this seems to be an excellent idea that the consumer is placed on the same footing as these sellers of financial products.
However, keep reporting and paperwork as light as possible for the financial services industry."

Tupac_Goldstein wrote, "The Obama regime seems dedicated to unlimited expansion of the federal government. Is there any end point?"

And chartguy said, "An alphabet soup of regulators did nothing to prevent the CDO [Collateralized Debt Obligation] disaster. Another agency will not help."

lbennatt wrote, "Remember all those jobs he is going to create/save? He is going to have everyone working for the government. One gigantic round robin ponzi scheme, all in the name of 'we just want ta hep you and protect you'."

macdoodle1 said, "DO IT NOW! SO MANY SENIORS and others on the fringes as well as middle class ARE struggling from the losses! and so many "products" are not covered...."

4noone wrote, "Too bad the SEC is populated with idiots who don't understand finance. We already have this commission but it is too easy to fool."

billastt said, "The banking collective has certainly proven that regulation to protect the consumer and the population in general, IS REQUIRED."

cuervoneil wrote, "I think regulation is a great idea! General consumers who use financial products do not always read the small print and do not always realize what they are getting into. Go for it!!!"

vpucsekberman said, "It sounds like an excellent plan. Get rid of SEC-totally useless. It should not be staffed by industry insiders who protect the financial system. They should have full legal powers to ensure that its authority is respected. It should have a strong consumer section as well to regulate loans, credit cards and other consumer interests."

dstafford2 warned, "I think this is not a wise idea, as outlined here. This will place a huge chill on innovation in the financial industry, and create a heavy-handed, easily politicized new government agent that can crush competiton and favor one group over another... My vote is no -- let the existing agencies do their jobs, just do them better..."

And parkerjere asked, "What's the use of having another regulating agency if they refuse to regulate, as did the SEC... People keep saying that the SEC regulators were "asleep at the wheel." You'll forgive me if I don't believe it--if I think that the banks and Wall St. were allowed to rip us off by their friends in the executive branch..."

We'll close with the Teddy Roosevelt segment:

dldbug wrote, "I suppose Teddy Roosevelt was a communist in his support of the first Pure Food and Drug act. And that measure of course was an necessary interference of Big govt in the private sector. The American people do not share the Right's infatuation with the laissez faire America of the 1890's. The last two national elections reflect that sentiment."

But TheodoreRoosevelt [yes, this screen name is one of our regulars], replied, "No he was a Conservative who gave us our National Forests, broke up 32 Monopolies, and was not against watch dogs to make sure the rules were followed..."

And Geria added, "Teddy Roosevelt got the nickname "trustbuster." They wouldn't have called him that if he had behaved like republicans do today."

All comments on this article are here.

By Doug Feaver  |  May 20, 2009; 7:29 AM ET
 | Tags: Economy Watch, Regulation  
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