There are lots of problems with America’s regulatory agencies. Budgets shouldn’t be one of them.
Take the Commodity Futures Trading Commission – CFTC, a great case in point.
The CFTC is responsible for a lot of regulation. It now regulates the largest, most opaque market on the planet, the $400 trillion-plus swaps derivatives market.
And while $400 trillion is a big deal, so is catching LIBOR manipulating crooks, and commodity pooling Ponzi-schemers, and Jon Corzine, and determining whether banks (I’m not going to name names, Goldman Sachs) that own commodity warehouses that control metals are manipulating prices.
All of the market-related things the CFTC regulates and is responsible for are, depending on who’s being screwed, relatively equal in importance.
But the CFTC has to prioritize because the tiny agency with a staff of only 700 (155 of whom are actually enforcement officials with a tiny budget of $195 million) doesn’t have the resources to do all the jobs it’s tasked with doing. That includes writing 62 new laws as part of the 2010 Dodd-Frank Act, implementing them, and enforcing them.
President Obama wanted to hike the CFTC’s budget to $315 million in 2014, but that’s been shot down by Republicans who claim the CFTC overreaches.
Just for comparison purposes, the SEC’s proposed budget for 2014 is $1.67 billion, and it has staff of approximately 3500.
So, how come the CFTC has such a tiny budget? And how come the CFTC was the only regulatory agency shut down when the U.S. deficit financing Spruce Goose slowed down to just a hair faster than stall speed?
Oh, that would be because the usual powers that be all, see all, and manipulate all the things that the CFTC is trying to make fair, orderly, and transparent want to kill it, period.
They probably won’t be able to do that. But they’re doing a good job of cutting off the head of the snake that bites them by cutting off its funding.
Who are “they?”
They are a lot of people who make money – a lot of money – in commodities, farming, trading, and banking. And they are master manipulators. They manipulate lawmakers on the Agriculture committees and the Banking and Financial Services committees in Congress – which have jurisdiction over the CFTC – by raising fat bushels of campaign donations.
So, screw Congressional budgeting. Don’t let Congress pay them, or not pay them.
Let the CFTC (and the SEC for that matter) keep the money they win in settlements as a result of successfully prosecuting civil cases after harmed investors have been remunerated.
Let them staff up with the money they get from crooks to make more money for their departments. Let them pay bonuses to themselves for prosecuting criminals who get jail time.
If regulatory agencies like the CFTC are really good at making money, then crooks and criminal activity will be greatly reduced. And if the settlement money they win gets reduced because they’re incentivized to wring out the manipulation and scheming in our once (but no more) free markets, their own budgets will shrink and they’ll have to downsize. That will make them better at engendering fair, orderly, transparent, and honest free markets.
Hey, it’s not a perfect solution, But you’ve got to admit it’s a good starting point.
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