Industry's False Claims About Cost Benefit Analsyis
Better Markets has been rebutting the industry’s false claims about what they call cost benefit analysis for some time. It is one-sided, biased and incomplete. It has no support in the statutes, legislative history or the policy of financial regulation. Moreover, it is not about cost benefit; it is nothing more than the industry's latest weapon to kill financial reform.
We’ve filed 2 Amicus briefs in both pending cases challenging CFTC rules; we rebutted a CFTC Commissioner’s attempt to enlist OMB in the cost benefit fight at an indendent agency; and, we’ve just published a Report entitled “Setting the Record Straight on Cost-Benefit Analysis and Financial Reform at the SEC.”
The Report, press release and 1 page fact sheet are available here: http://bettermarkets.com/blogs/wall-street%E2%80%99s-secret-plan-defeat-financial-reform
The Amicus briefs filed in the CFTC cases are available here: http://bettermarkets.com/blogs/killing-financial-reform-cost-benefit-analysis and http://bettermarkets.com/reform-resources/brief-better-markets-inc-amicus-curiae-support-defendant-commodity-futures-trading-
The letter rebutting the CFTC Commissioner’s improper attempt to get the OMB involved in CFTC rulemaking can be found here: http://bettermarkets.com/reform-news/better-markets-calls-omb-reject-recent-request-weaken-new-financial-reform-rules
While the Report is focused on the SEC and the Amicus briefs & letter are focused on the CFTC, most of the analysis applies to all financial reform rulemaking. Moreover, all contain useful information to rebut the industry’s many attempts to impose their version of cost benefit analysis.
The industry attempt to use such an incomplete version of cost benefit reminds me of those who claim that the GDP measures everything, which Robert Kennedy lacerated some time ago:
"Our gross national product ... if we should judge America by that - counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for those who break them. It counts the destruction of our redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars for police who fight riots in our streets. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children."
"Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans."
The same is true of the industry's version of cost benefit analysis. It includes all the costs industry claims (but does not prove) it will have to bear, but none of the costs or benefits to society. Tellingly, it always excludes the cost of the financial collapse and economic crisis.