The Left: If it moves, regulate it. If it doesn’t move, regulate it anyway. Control, micromanage, apply every dollar of taxpayer funds available (or not, just keep the spending going!)

There’s an informative Op-Ed in today’s Washington Times on-line by Representative Jeb Hensarling (R, Texas) about the Dodd Frank Act and what it means in the Real World as opposed to the one occupied by today’s Democrats and their liberal mentors.

The news of J.P. Morgan Chase’s recent trading loss has raised the cry of “I told you so” from proponents of the almost 2-year-old Dodd-Frank Act. They say the law’s Volcker rule would have prevented such a loss and that without more regulation, financial institutions will continue to make poor investment decisions.

As an opponent of Dodd-Frank and one of many who have warned against the politicization of our economy, the threat of future bailouts and attempts by the government to eliminaterisks, I also wish to say, “I told you so.”

Within Dodd-Frank’s 2,300 pages are provisions allowing the government to designate certain financial firms “systemically important financial institutions” - otherwise known as “too big to fail” (TBTF). The law then empowers the Federal Deposit Insurance Corp. (FDIC) to seize a troubled TBTF firm for the purpose of winding it down. In doing so, the FDIC can borrow up to the book value of the institution from taxpayers, an amount that could be astounding, as Bank of America, Citigroup and J.P. Morgan are all $2 trillion institutions.

Because private financial firms such as J.P. Morgan inevitably will blunder regardless of their size or sophistication, designating any firm TBTF is bad policy and worse economics. It causes erosion of market discipline and risks further bailouts paid in full by hardworking Americans. It also becomes a self-fulfilling prophecy, helping make firms bigger and riskier than they otherwise would be. Look no further than Fannie Mae and Freddie Mac and their taxpayer-funded bailout to the tune of nearly $200 billion.

Unfortunately, Dodd-Frank codifies TBTF into federal law. Since its passage, the big banks have become larger and the small banks have become fewer. As a nation, we would do well to rethink TBTF’s fundamental premise before it’s too late.

Even if some conclude that certain financial firms are indeed TBTF, it begs the question whether Washington is even competent to manage their risk. A review of the federal government’s track record in this area does not inspire confidence. The Federal Housing Administration’s poor risk management has left it severely undercapitalized. The Pension Benefit Guaranty Corp. has an unfunded obligation of $26 billion. Even the National Flood Insurance Program is $18 billion underwater (pun intended). Then we have Fannie and Freddie.

Yes, then we do.

We have said here before that one of the greatest shortcomings of “progressives” is that they never learn from mistakes: “It failed the first ninety nine times, so it’s got to work the hundredth!”

Of course, as most of us already realize, regulating, along with its partner, taxing, are hand in glove activities for the left, and any mishap of any kind, even one caused by them, provides them with an excuse to pass legislation applying more rules, thereby creating more bureaucracy as people must be brought in as permanent staff to monitor compliance and churn out additional idiocy in order to justify their stuffed salaries, pensions and overblown benefits.

Anyway, the entire Op-Ed is here.