Things are not at all what they seem.
The word “regulation” has become a euphemism for control and the infestation of concentrated power and wealth. The “need to regulate” is floated as a panacea. In reality it is mere conduit for the influx bureaucracy gone wild.
Consumers – market participants – need to be protected. And yet these protections simply morph into a lobbyist’s dream come true, ending in an industry-constructed bureaucratic death trap that ultimately creates a medieval mote surrounding the masters.
We end up with revolving door madness, in which regulators are sourced from industry to “serve” and then return back to consult. Examples of individuals who have moved between roles in this way in sensitive areas include Dick Cheney (military contracting), Linda Fisher (pesticide and biotech), Philip Perry (homeland security), Pat Toomey, Dan Coats, and former FCC commissioner Meredith Attwell Baker (media lobbying).
High-profile U.S. Representative Democratic Dick Gephardt left his congressional post to become a lobbyist. His lobbying agency, Gephardt Government Affairs Group, earned close to $7 million in revenues in 2010 from clients including Goldman Sachs (NYSE:GS), Boeing (NYSE:BA), Visa Inc., Ameren Corporation (NYSE:AEE), and Waste Management Inc.
And it’s widespread, occurring in all of the following agencies:
Bureau of Ocean Energy Management, Regulation and Enforcement
Environmental Protection Agency
Federal Aviation Administration
Federal Communications Commission
Federal Reserve Bank of New York
Food and Drug Administration
Nuclear Regulatory Commission
Securities and Exchange Commission
Office of the Comptroller of the Currency
It is needless to mention health care policy and regulation. Of course, the grotesque poster children in all of this hail from giant finance – where the newspeak is loudest.
The years of the so called financial deregulation, culminating with the end of Glass Steagal, came from the many decades of infestation that came before. This is how we end up with too big too fail, too big to prosecute, and just a few massive entities at the helm of modern world finance.
We are on the slippery slope toward totalitarianism, in the name of regulation. But the spirit of the word – the meaning understood by most – is ‘to be’ protected from the abuse of power – usually big corporation.
Observing the early evolution of net neutrality can be nauseating. No matter how it is characterized, in this, the modern age of regulatory capture and regulatory capitalism, it will only end well for industry.
Precious metals investors will get a kick out of this one: