Current Events vs. Founding Documents

Entry 13                                          Submitted by: Mark Musselman

Current Event

As reported by the Los Angeles Times December 12, 2009 – (full article available on line)

More than a year after the financial crisis devastated the economy and triggered massive taxpayer bailouts, the House narrowly approved the most sweeping overhaul of financial regulations since the Great Depression in hopes of preventing a similar catastrophe.

The sprawling measure would grant the government broad new authority to break up large financial firms if their size poses a major risk to the economy, as well as to seize and dismantle such firms if they teeter near bankruptcy. A new $150-billion fund, paid for by the financial industry, would cover the costs of any government takeovers.
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One of the most controversial parts of the legislation is the creation of a Consumer Financial Protection Agency. The new agency would have the power to write rules for a variety of financial activities involving loans or credit, to monitor large banks for compliance and to ban products and business practices it deemed unfair, deceptive or abusive.
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The legislation would prohibit future bailouts to save a company from bankruptcy, as was done with AIG, by granting the government a new “resolution authority” for seizing and dismantling large financial firms before they collapse.

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VS

Congress verses the authority granted it in the Constitution.

Founding Document

The Constitution, Article 1, Section 8.

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

We the People:

There is nothing in the article above or any other in the Constitution which grants Congress the authority to regulate financial firms. Some may site precedence from past regulations, but as the saying goes; “two wrongs do not make a right”. When they exceeded their authority by forcing companies to grant risky loans over the last 20 years, Congress destabilized the banking industry; and thus it has proved the wisdom in the constitutional limits on their power.

The US House of Representatives are again pitting the people against large companies as a diversion from Congress’s past mistakes in order to justify their grasp for more power. President Obama is loudly admonishing financial executives for the same reason. We must let them know that we recognize their maneuvers, and that we will vote accordingly.