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  • 50% More Bureaucrats = Government “Cost Savings” for Financial Derivatives Reform

    Sponsors of derivatives “reform” legislation claim it will reduce costs to derivatives users.

    Just how more government regulation is supposed to reduce costs in the private sector has never been exactly clear, but discussion at Wednesday’s Senate Agriculture Committee mark-up of derivatives reform legislation revealed that the “reform” will cost taxpayers big time: a 50% increase in staffing (and other costs) at the Commodity Futures Trading Commission (CFTC), the agency that would enforce the new regulations.

    CFTC Chairman Gary Gensler, announced at the mark-up that the bill would require 250 new employees and a “substantial” investment in new technology above the approximately 500 employees and $146 million the CFTC will spend this year. What’s more, Gensler said those costs are lower than they might otherwise be because the bill gives the CFTC authority to require derivatives clearinghouses to install and pay for CFTC-mandated electronic monitoring and compliance systems. Gensler did not, however, provide any estimate of how much the government-mandated spyware would “save.”

    It is easy to see how the new government mandates will increase costs for derivatives trading firms. Now we’re told it will also cost taxpayers another $75 million or so. Of course the real cost of government regulation in distorting markets and increasing private sector costs is many times the direct costs of housing and feeding the bureaucrats. Just how all this is supposed to save money for people who use derivatives, however, has yet to be explained.

    Posted in Economics [slideshow_deploy]

    5 Responses to 50% More Bureaucrats = Government “Cost Savings” for Financial Derivatives Reform

    1. Billie says:

      The people of America have the intelligence to see this all is deliberate. It may not be the majority as many have been brainwashed. If people can't see this dangerous ignorance, every PART OF AMERICA IS GONE!

      For those who don't see it, democrats love your human weakness. That's the way they portray you all. Democrats create speculation and then the illusions to follow. We continue to lose FREEDOM AND this is one step closer to KILLING THE ECONOMY.

      Listen to the king himself, bringing self-pity to the table as if every single person hasn't had hardships they've overcome without government dependency in their lives. People of endurance who may not have money, but do have the love of freedom and appreciate the personal responsibilities the government is suppose to support, not interfere to take over!

      So, if your human weakness cannot build strength, vote democrat and you won't have to bother.

    2. MBSS says:

      yeah, god forbid we hire some more people to regulate those shadow markets which nearly destroyed the world economy not so long ago. the key is to deregulate and do away with all government altogether. then we would live in a free market utopia, and we could walk down streets of gold hand in hand eating schnozzberries in the beautiful twilight.

      all hail the Market. the Market is is always right. government is always wrong. taxes are always bad. it's simply a coincidence that all my dogma happens to make davos man very, very rich, and the blue collar anti-abortion bible-belters who vote it into office very, very poor, and very, very angry. too bad those people will never turn around and look at the very culprits who are destroying their economic lives. no, it's not obama, pelosi, and reid. it's the heritage foundation, grover norquist, and wall st.

      kudos to you guys for getting people to belive in your voodoo economics hocus pocus. shazam.

    3. thestate says:

      MBSS: Nothing is more amusing than the economic illiterate accusing the literate of voodoo economics.

      It is good to know that most if not all of the postulates and theories espoused by the "voodoo economists" can be empirically proven through data. Which is exactly why esteemed economists like Milton Friedman can have such luminous careers. The U.S. has enjoyed prosperity unlike any in human history because of market principles and not because of central planning from Washington. Those in power in Washington now want to literally *transform* Washington's role in our lives. And the result will be less prosperity, but more equal misery, which is fine by its architects and its supporters.

      Ironically, instead of removing bubbles from the economy, government intervention will create more as rent-seeking and identity politics becomes the reigning paradigm.

    4. Purpleguy says:

      MBSS is correct. "no, it’s not obama, pelosi, and reid. it’s the heritage foundation, grover norquist, and wall st." Capitalism has as it's basis the accumulation of capital and the use of human labor to support the concentration of wealth to prop it up. In other words, those with the most live off the labor of those with the least, because the wealthy have the capital. Now, greed is a powerful motive and can be a good thing – it spurs innovation, risk-taking, and creativity – which actually is the basis of America's good fortune. Having said that, unbridled capitalism, with little or no regulation will corrupt itself just as the old adage says, "Power corrupts, and absolute power corrupts absolutely." The trick is to strike a balance between regulation of the capitalistic society without killing the innovative and creative spirit. Clearly, the very recent Great Recession should teach us that there was not enough regulation to avoid the corrupting influences inherent in Capitalism. The quickest way to ruin is with complete laissez-faire policies, and anyone who advocates that doesn't know what they're talking about. I, for one, am happy, and you should be too, that GW Bush was quickly out of office once the Great Recession starting sinking this economy. I find it funny how anything Obama does is restricting your freedom in some way – when without his policies, you would surely be free to devolve into complete chaos – a continued crappy education, a continued deregulation which promotes the corrupting of America, continued profit motive healthcare – whether government run or not, non-profit healthcare is what we need; insurance companies need to make money, so I don't blame them, but why should anyone have to choose between making money off the sick, or losing their job? – a continued nuclear world, a continued 2 ill-conceived wars and a host of other essential changes that we all hoped he would bring. That hope and changy thing is working out quite well, whether you know it now or not. Have a nice day.

    5. Billie says:

      If the government had been doing THEIR SAID JOB OF OVERSIGHT IN THE FIRST PLACE IT WOULDN'T HAVE GOTTEN TO THIS POINT! people have the freedom to go where they can or want in this country. It's all based on personal ABILITY AND WILL!

      Capitalist aren't that without working to become that. Just like any of the "poor" many capitalists were poor also. They put their own money in the pot. They made their own way thanks to the freedom of America to prosper, and HIRED those that QUALIFY AND CHOOSE, to work for them.

      it was embarrassing as all heck for the president to suggest "greedy ceo's."

      SO WHAT? that's their conscience and my choice to work there. HOW PATHETIC.

      Get rid of fannie and freddie, the peoples forced obligation to pay, not wall street, who pays for itself!

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