Tag: john berlau

Financial Regulation, Helpfully Focused

The Senate last week agreed to an amendment to the financial regulation bill, S. 3217, sponsored by Sen. David Vitter (D-LA) and Sen. Mark Pryor (D-AR). As The Wall Street Journal explained:

The measure restricts the Fed’s regulation to companies “predominantly engaged” in financial services, defined as those where at least 85% of annual revenue or consolidated assets come from activities related to finance.

The Journal chose the angle that the amendment exempted GE Capital Services, but the measure has value for other larger manufacturing companies that have developed their own financial opreations. Sen. Vitter issued a statement that makes the point:

“The Fed should not be regulating firms outside of its area of expertise, which is a practice that would only weaken our financial system. Sen. Pryor shared my concerns that previous language of the bill gave the federal government far too much power to grab control of the economy, and we’re pleased that our Senate colleagues agreed to adopt our amendment to focus this legislation on truly financial companies,” said Vitter.

Before the bipartisan Vitter-Pryor amendment, the language of the financial reform bill would have allowed virtually any large company engaged in broadly defined “financial activities” to be designated by the council for enhanced supervision by the Federal Reserve. That language would create an opening for the council to designate non-bank financial companies for enhanced supervision so they could be charged assessments to pay for future banking crises.

Sen. Pryor also issued a statement, in which he said:

Under this bill, we need to fix what’s broken, and leave manufacturing companies, retailers and other non-financial companies alone. They were not part of the problem and should not be subject to enhanced supervision by the Federal Reserve. Our amendment simply clarifies that banks and financial companies deserve a higher threshold of review, while companies like Home Depot, Sears, Wal-Mart or Dillards don’t.

Writing at BigGovernment.com, John Berlau at the Competitive Enterprise Institute describes the political dynamic that helped win passage of the Vitter amendment. No matter the real target, the “progressives” will attack big business, he warns, but the attacks can be warded off. (continue reading…)

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


From the Latin: We’re Going to Regulate Every Aspect of Life

Washington Post, “FDA plans to limit amount of salt allowed in processed foods for health reasons“:

The Food and Drug Administration is planning an unprecedented effort to gradually reduce the salt consumed each day by Americans, saying that less sodium in everything from soup to nuts would prevent thousands of deaths from hypertension and heart disease. The initiative, to be launched this year, would eventually lead to the first legal limits on the amount of salt allowed in food products.

Food manufacturers are undertaking serious, voluntary efforts to reduce the salt content in their products.

Voluntary? Hah!

“We can’t just rely on the individual to do something,” says Cheryl Anderson, an epidemiologist at the Johns Hopkins Bloomberg School of Public Health.

Here’s an idea. Salt is one of the most important commodities and even currencies in the history of man. The word “salary” comes from the Latin “salarium,” meaning money paid to soldiers to buy salt.

So, why not just wrap salt regulation in under the financial regulation bill in the Senate? As John Berlau of the Competitive Enterprise Institute argues, the financial regulation bill defines large (non-banking) sectors of the economy as banks in order to regulate them. If you sell salt or use it in your products, you’re a bank!

In other salt-related news, Mark Kurlansky, author of Salt, has a new book out, “Eastern Stars,” about the great baseball players from San Pedro, the Dominican Republic. He speaks Wednesday evening at the DC bookstore, Politics & Prose. Salt is a very entertaining, commodity-oriented history of the world. We were hoping Zinc was next.

UPDATE (10:10 a.m.): Walter Olson comments at Overlawyered.com:

We’ve been warning of such developments for a while, and they come as little surprise given President Obama’s pick of hyper-regulator Margaret Hamburg as FDA commissioner.

P.S. Perhaps we should invite comment from the New York Times journalist who sternly admonished an interview subject recently: “You shouldn’t trivialize issues of health and safety by calling them nanny issues.”

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


A Manufacturing Blog

  • Categories

  • Connect With Manufacturers

            
  • Blogroll