Fund the CFTC & Stop the Crooks & Predators from Ripping Off America’s Farmers & Families
Better Markets’ President and CEO, Dennis Kelleher, is testifying before the Senate Committee on Agriculture, Nutrition and Forestry on July 17, 2012 at 10AM at a hearing entitled “The Dodd-Frank Wall Street Reform and Consumer Protection Act: 2 Years Later.” The Ag Committee has jurisdiction over commodities and, therefore, has jurisdiction over the Commodity Futures Trading Commission (CFTC) and most derivatives trading.
As Dennis notes in his opening statement, it “is well known [that] derivatives and the over-the-counter markets were at the heart of causing and spreading the financial crisis. That is why Title VII [the derivatives part of the Dodd Frank law] is vital not only to effective financial reform, but also to the protection of the American people, taxpayers, Treasury, our financial system and our economy.”
While his testimony addresses specific derivatives issues, including the Volcker Rule, cross border enforcement, CFTC funding, cost benefit analysis, commercial end users, and more, he first puts this all in the context of why we have the financial reform law at all: because Wall Street’s recklessness and greed caused the biggest financial collapse since the Crash of 1929 and the worst economic crisis since the Great Depression. As detailed elsewhere on this website, he also discusses the cost of that crisis, which have reached into every corner of our country.
Dennis then addresses two of the key issues: funding for the CFTC and the use of cost benefit analysis to attack financial reform:
“Some critics ask why the CFTC didn’t stop MF Global, Peregrine or some of the other crooks and predators from ripping off American farmers and families. But many of those same critics voted to cut funding for the only commodity cops we have: the CFTC…. You can’t be for protecting farmers and families and be against dramatically increasing funding for the CFTC.”
“The latest weapon to gut financial reform is the innocent sounding concept of “cost benefit analysis.” It seems sensible and appealing. After all, assessing and weighing the costs and benefits of taking an action appears on the surface to be reasonable. However, in the context of regulation generally and financial regulation in particular, that thinking is simply wrong, it will greatly weaken financial reform, and leave the American people unprotected again.
“When you hear someone touting the benefits of cost-benefit analysis, think about the Ford Pinto calculation of the 1970s. They could correct a fatal design defect in their cars for $137 million or pay just $50 million for the claims of the 180 people killed and 180 people severely injured, ‘saving’ $87 million. Cost benefit analysis sounds good in theory, but it’s often a disaster in reality.”
Read the full opening statement here.
Read the full written testimony here.