As far as I know, President Barack Obama never said that if you like your life insurance options, you can keep them. He may therefore get off the hook as a deceiver if the Dodd-Frank regulatory law does what is now plotted, though he will still share responsibility for the insurance provision that, along with others, could bloody lots of noses.
A conglomeration of marketplace interventions lovingly promoted by the president, Dodd-Frank is slowly but surely headed our way. It’s true that different agencies had been too busy bumping into each other and wrestling with complicated passages to get all the rules written, but Obama called the regulators in to tell them, by golly, to start regulating. And so, befuddled or not, the regulators are coming.
The idea behind the law — officially known as the Wall Street Reform and Consumer Protection Act — is to make sure we never have another financial crisis of the kind we had in 2008. It was supposed to address the issue of too big to fail, does so only questionably and is ultra-filled with a jumble of bureaucratically empowering irrelevancies and potentially damaging guesstimates. This collaboration of the intellectually presumptuous and the ideologically driven is finally too big to succeed.
One of its inexcusable forays has been to include some life insurance companies among institutions regarded as posing threats to the financial system if something goes terribly awry. A not infinitesimal issue is that they do no such thing.
If companies failed in insurance pursuits, many people would suffer, but the financial system would not be affected in a major way. It is additionally observed that states have done a reputable job overseeing them and that the companies themselves have done a remarkable job of sound, alert management. Intervene foolishly, and, as Iain Murray of the Competitive Enterprise Institute has written with reference to a study, purchasers could someday have fewer choices in policies that could also cost more and return less.
Members of both parties in Congress are wise to this stupidity and just maybe, conceivably, will do some little something about it, though that would be a meager start to what is really needed. We need bold, enlightened souls to further reshape Dodd-Frank and, beyond that, to reduce the rest of our egregious regulatory excess. Right now the mishmash exceeds an astounding 134,000 pages of federal rules that are more than a little punishing, as an underpublicized study underlines.
Two economists (John Dawson and John Seater) estimated that federal regulations promulgated over the past 60 years may have made Americans about one-fourth as well-off as we would be without them. If, then, you want some rough notion of what a more liberated economy might possibly have done for you, multiply your current income by four.
But wait. Weren’t many of those regulations really, truly needed? Yes, of course. But many weren’t and are constitutional affronts. As a Wall Street Journal series showed, a vast number have even led to criminal charges against people who could not possibly have known they were violating any stricture, a practice aspiring to despotism.
Look, too, at how nothing is too tiny to generate colossal governmental consternation. Right now, the Federal Trade Commission is going after a 137-year-old, nonprofit music association for suggesting to its members — mostly piano teachers — that they shouldn’t try to recruit students from each other. A Journal columnist, Kim Strassel, notes that the group has had to turn over thousands of documents, sign a silliness-ridden consent decree and submit to a burdensome, costly 20-year antitrust compliance program. And for what? Proffering an admonishment.
It’s craziness that won’t affect most of us the way new life insurance rules might and Obamacare is increasingly doing, but helps describe the current reign of in-your-face bullies.
Jay Ambrose is the former director of editorial policy for Scripps Howard Newspapers, and was editor of The Rocky Mountain News in Denver and the El Paso-Herald Post.