By John Feehery
Sometimes the private sector does it to itself.
That’s what makes Washington such a confounding place to do business.
Purists like to talk about how the government shouldn’t get involved picking winners and losers.
It is a nice thought. But making that nice thought reality is not always possible.
From outside the beltway, it looks so simple. Those damn politicians, who think they are holier than thou, get their sense of glory by regulating the poor old business sector, an innocent bystander that would act efficiently if only the government would stay out of their business.
Sometimes, though, some bad actors in the business community require politicians to step in. And sometimes, businesses come to Washington to achieve a strategic advantage.
And sometimes, when they do that, they make it more difficult on themselves.
There are plenty of examples where government needs to set common-sense rules of the road to promote commerce. Food safety is a good example of that. So is pollution control.
But sometimes, some businesses try to use politicians to skew the rules to help them achieve short-term objectives.
An example of that comes with what community banks are trying to do to national banks.
The Independent Community Bankers are at war with banks that are big enough to serve a global audience.
They just released a report that calls for these big banks to be required by the government to set aside an unrealistic amount of money in their vaults or to be broken up by government fiat.
They say that because these banks are too big, they have an unfair advantage in the marketplace.
As the ATT commercials point out, bigger is usually better, but that is not always the case. And indeed, the banking marketplace is diverse enough to have banks of all shapes and sizes.
But having global banks has real advantages for the American business community. They tend to be much more stable in economic downturns, they have the capital to help finance really big deals, they make the majority of home loans in this country, they make the vast majority of small business loans, and they provide essential services to the global economy.
Anybody who has ever watched “It’s a Wonderful Life,” understands why setting capital standards too high will hinder lending and stifle economic growth. Who can forget the scene when Jimmy Stewart tried to explain to his panicked neighbors why he didn’t have all the money that was in everybody’s accounts in the Savings and Loan, because he had lent it out to help finance the American dream for all of his customers.
It’s the same things with the entire banking industry, big and small. Requiring an unnecessary amount of capital in big banks would have a disproportionately negative impact on the American economy.
But that is exactly what the ICBA is demanding that policy makers do to the bigger banks. And the reason is pretty simple. They want them to have to face more regulations in the hopes that the smaller banks will have a competitive advantage.
Now remember, that the ICBA is the same group that helped to facilitate the passage of Dodd-Frank in the hopes that would give them a competitive advantage over the bigger banks. But it turns out that Dodd-Frank is actually making it harder for smaller banks to do their jobs of lending to consumers, and it has actually helped make job creation more difficult as a result.
This is dangerous ground.
The ICBA obviously believes that the government is so finely tuned, so efficient, so precise that it can call for limited government regulation that will only hurt their competitors and not their members. But experience dictates another outcome. Usually, when a business sector calls for the government to step in on their behalf, it ends up stepping all over the place, and who know where it ends up.
I am not a purist. I believe that government does have a limited yet important role in regulating the marketplace and protecting consumers.
But when a part of the business community attempts to screw its competition by going to the government to set favorable rules, they usually end up screwing themselves.
The ICBA ought to stick to its knitting and quit trying to stick it to the big banks. They aren’t doing themselves any favors by calling for a massive intrusion of big government into their industry.
By John Feehery
I think it is kind of weird that a high official in the Internal Revenue Service decided to take the 5th Amendment to avoid answering questions of a Senate Committee investigating IRS political shenanigans.
The 5th Amendment says:
“No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”
The 5th Amendment is usually invoked by gangsters, hucksters, murderers and people implicated in complex gambling schemes. Usually, when somebody decides to take the 5th amendment, you can pretty much be assured that person is guilty of something.
What is Lois Lerner guilty of? Speaking the truth about her colleagues at the IRS at an American Bar Association meeting?
Like I said, this is weird.
It is also weird that the Attorney General, Mr. Holder, recused himself when the Department of Justice decided to seize the phone records of the Associated Press. I thought that was a weird answer to another Congressional committee.
Why would Eric Holder recuse himself from such a major decision? Why wouldn’t he tell anybody that he was recusing himself or put it writing or in any other way, make note of it? Why wouldn’t he tell the President about this kind of activity?
Did he recuse himself because he was afraid that he couldn’t keep a secret? Was he recused because he doesn’t have the proper clearances? Did he recuse himself because he knew what his DOJ was doing was wrong and he wanted plausible deniability? So many questions. This all is getting so weird.
Why did the White House not know that the intelligence world was going hard after James Rosen (who is perhaps the nicest guy in journalism, bar none)? Why didn’t they know that Team Holder was doing everything they could to track down a Fox News journalist and maybe more than just one journalist at Fox?
Did the President know about how the CIA or the FBI or the DIA was screwing around with Sheryl Attkisson’s computer? Attkisson has been pretty tough on the Administration, so tough that her boss, who happens to be the brother of the National Security Agency’s Communications Director, has told her to knock it off. But she won’t knock it off, and that is pissing off the higher-ups who have this great connection with the Obama Administration, and in this world of deception and intimidation, it is never a bad idea to have friends in really high places.
I wouldn’t be surprised to see Attkisson hired up by Fox, which happens to be the last news network with enough balls to take on the gang from Chicago.
All of this is getting very weird.
When the President tell us that he has recused himself from these scandals, we know we are in real trouble.
I don’t like it. Not one bit.