Regulators Protect Their Turf

Sean Hannity chortled last night on his Fox News show about the one place in the country where the unemployment rate is actually declining. That happens to be Washington DC. And, of course, his point was that under the "tax and spend" Democrats "big government" is growing at taxpayers expense.
 
Whether you buy into Hannity's act or not, one area where government could certainly use streamlining is in bank and securities regulation. And you would think after all that fell between the cracks over the past few years, Congress and the President would look to "reform" government oversight. But according to reports coming out of the nation's capital that won't be happening in any meaningful way. We'll still have the alphabet soup of various agencies watchdoging the investment markets. There's the FDIC, Comptroller of the Currency, the Fed Board, Office of Thrift Supervision, Commodities Futures Trading Commission, National Credit Union Administration and on and on. Oh, and the key oversight role over the insurance industry will still be divided up between the 50 states, who also have their own bank and securities regulators. Talk about keeping a lot of people employed who obviously were all asleep at the switch until the crisis hit.
 
Apparently, the regulators are fighting hard to keep control of their turf and the Congressional committees who oversee them don't want to give up any of their influence or turf either. So all these agencies will remain in place to get in each other's way like a bunch of keystone cops. That will be just fine with all the banks and other financial players. It will be easier for them to lobby and hold sway by dividing and conquering. Regulators have more power if the industries they regulate widen their activities and do more business so they are more agreeable to letting that happen. And the Congressmen on those influential committees can be more easily targeted for campaign contributions.
 
Is it any wonder why Washington DC is always considered the best investment market for commercial real estate to ride out a recession?  Hannity may indeed have a point.