Tuesday, September 18, 2012

Bloomfield on Fiscal Reform


Recently, Bill Bloomfield gave an unprecedented interview with Libertarian/Progressive Radio.

He outlined an itinerary of reforms which would accomplish much without creating waste, fraud, and bureaucracy.
Instead of 800 pages of reform of Dodd-Frank, one page delineating that taxpayer funds have adequate collateral banking them up would have been sufficient.  A similar law would have spared this country and many unsuspecting investors millions in the Savings and Loan failures in the late 1980s.

"Any bank that is "Too Big To Fail"-- has to be broken up."

"Too Big to Fail is Too Big, period." I would respond that Big Banks get bigger because of Big Government. Enforce real financial reforms which limit the scope of larger financial firms, including an end to easy subsidies and bank bailouts, and these immense firms will be forced to break down and sell themselves off.

The regulations and rules in Dodd-Frank are hurting small banks, because only the Big Banks can navigate all of those rules. Since the smaller banks are struggling to plow through all the regulations, they cannot lend any money. This point has not received enough attention. Rules and regulations end up hurting the smaller competitors, who have an incentive to play by the rules and benefit their clients effectively. As of now, smaller banks cannot lend any money, which hurt inspiring entrepreneurs who want to expand their operations and hire people. Big Government helps Big Banks and creates Big Problems.
Glass-Steagall needs to be reconsidered. Occupy Protestors have made this argument in Torrance, separating investmetn and commercial banking. Strong libertarians like Murray Rothbard supported the same measure, a "legal form of fraud" which he terms "fractional reserve banking".

Bloomfield also targeted the obvious -- there is too much legislation, which is benefitting special interests at the expense of the country and the taxpayer. Bloomfield refuses to take party boss or special interest money. This issue should be enough to give him the race against Henry "Congress Rich" Waxman.

ObamaCare contained one nasty provision throttling price and market exchanges, which Congressman Waxman defended: prohibiting the federal Congress from negotiating drug prices.

Bloomfield also attacked Sarbanes-Oxley, another archaic piece of legislation which has gotten let press but deserves more attetion.  An "overreacting to Enron", according to the candidate, the law failed to deal with liabilities that companies would hide off of their accounting balance sheets.

The real problem with Enron: Preventing accounting firms from auditing and advising about investment. I am surprised and pleased that Bloomfield commands a wide field of knowledge about financial and banking matters, a level of expertise matched with his independent status which will serve his constituents well in Congress.

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