This is a story of regulation run amok. It’s been said that the road to hell is paved with good intentions. Never is that thought more germane than when applied to government regulation. In today’s episode of “Regulation Run Amok” we’ll examine the unintended consequences of some well meaning regulation on community banks. For an excellent account of this phenomenon, please read the op-ed piece, “Main Street Lenders Choked by Regulators.”.
There has been a great deal of talk about government regulation lately. Liberals believe that all manner of problems would be solved if the government just regulated more of our lives.
Conservatives note that the government is already too big (based, at least, on the size of the deficit). However, liberals ignore the simple fact that heavy regulation has often failed despite America’s 100+ year long experiment with “big government”. Conservatives turn intellectually blind when reminded that it was often their conservative heroes (Reagan, GW Bush) who grew the size of government and the size of the related deficits the most.
Given the obvious issues with both liberal and conservative dogma, I am today adopting the Realist political philosophy. This philosophy will espouse the recognition of simple truths. One of those truths is that government is not sufficiently competent to play as large a role in our lives as the liberals would like it to play. The regulatory pummeling of community banks while those “too big to fail” only get bigger is but one example of this reality.