Freedom to Harm
While the dramas of the Trump White House dominate the headlines, behind the scenes the destruction of public goods proceeds apace.
This Post is about the erasure of regulations that is taking place outside of the media spotlight. It takes its title from a 2013 book by Thomas McGarity, who wrote about the consequences of eliminating regulations that protect people and the planet, thereby giving corporations the “freedom to harm.”
Underway today, if out of sight, is the “deconstruction of the administrative state” promised by the Trump White House. This deconstruction is aggressive and violent: it means the demolition of the capacity of our government to protect the safety and health of Americans, to repair and maintain our basic physical infrastructure, to protect the environment and to provide myriad essential public goods and services.
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Freedom to Profit Without Regard to Harm:
Eliminating Protective Regulations
We’ve heard a great deal about the widely-publicized defeat of the Trump-Republican health care legislation. But other devastating legislation is moving quietly forward: laws that would grant powers to the executive branch and Congress to eliminate existing consumer and environmental regulations across the board, as well as laws that would stymie the development of future regulations to protect our health and safety.
In January the House passed three pieces of legislation that, if also passed by the Senate and signed into law by the President, will paralyze federal agencies and gut their abilities to protect the safety, health and financial security of Americans. They are:
* The Regulatory Accountability Act;
* The REINS Act; and
* The Midnight Rules Act.
These bills are designed to “neuter” the federal government and “cripple” its ability to protect people. They will “prioritize corporate profit over the health and safety of the American people,” as Thomas McGarity wrote in his analysis of the Regulatory Accountability Act.
To read about the specifics, see:
The Most Dangerous Bill You've Never Heard Of Just Passed The House
A New Law that Could Cripple the Federal Government
The Quietly Passed Regulatory Accountability Act Threatens Health and Safety
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And Here Are Other Examples
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Freedom for Banks to Deceive Customers
You may have heard about Wells Fargo’s tactic of creating phony accounts in its customers’ names and then charging fees of which customers were unaware. You may not know that this scheme was brought to light and stopped by the Consumer Financial Protection Bureau (CFPB). The CFPB is a little-known agency created during the Obama Administration as part of the Dodd-Frank banking legislation, which was passed in response to the 2008 financial meltdown.
The CFPB is now in the gunsights of Trump and the Republican Congress, who plan to gut or perhaps kill the agency because, basically, it has been “too effective.”
Indeed, the CFPB has been doing a notable job of protecting the financial interests of citizens, levying fines on banks and punishing others who have committed fraud. According to the New York Times, CFPB call centers “field roughly 25,000 calls each month; its website receives about 22,000 complaints monthly. Since July 2011, the bureau has handled over one million such complaints, sending them to the companies and ensuring that they respond. It has published more than 700,000 of these grievances on its website.”
The Washington Post writes: “In its five years of existence, the bureau says it has recovered $11.7 billion for more than 27 million consumers.”
So why are Trump and the Republican Congress gunning for it? Gretchen Morgenson of the New York Times writes:
“the bureau has also made powerful enemies among financial institutions whose executives have the ear of Mr. Trump and other Republicans. According to a leaked memo…Jeb Hensarling, Texas Republican who heads the House Financial Services Committee, will move forward with legislation to weaken the bureau and its enforcement powers.”
Most of the time we are told that government is “inefficient” and can’t get its job done. That’s the dominant message. It is ironic, then, that the reality is quite the opposite: effectiveness and efficiency in government not only go unrewarded but are often punished.
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Freedom for Polluters to Dump Toxic Sludge into Rivers
The federal government is now also being punished for its successes in environmental protection: Clean air and clean water regulations are targeted for elimination and the Environmental Protection Agency is slated for a 31% cut.
Even the free-market oriented magazine, The Economist, is alarmed at the indiscriminate dismantling of regulatory and environmental protections. In their March 4 th issue, they noted that “the freedom to dump toxic sludge into rivers will not improve American’s living standards.”
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Freedom for Wall Street to Defraud People Trying to Save for Retirement
In our post last April, “ Good Financial Advice - Now Legally Required,” we wrote about a new regulation from the Labor Department that would require retirement investment advisors to provide advice that is in their clients' best interest. Most people might assume that such has always been the case. Wrong: retirement advisors often have incentives to steer clients toward particular investments that would benefit their own financial interests regardless of their clients’ needs or interests.
The regulation, which was scheduled to come into effect this month, is likely to be trashed. Trump has issued a directive ordering the Labor Department to review the rule with an eye towards rescinding it.
Last year the New York Times wrote that the regulation would “encourage a shift of retirement funds into lower-cost investments — potentially saving billions of dollars for many ordinary investors — while setting off one of the biggest upheavals in the financial services industry in decades.”
Yet another example of government being “too effective” on behalf of the citizenry – exemplary performance doomed to be punished for daring to threaten another Wall Street business model.
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What is the reason for all the demolition work?
The Republicans and Trump say that they are simply getting rid of “job-killing regulations.” In a future Public Goods Post, we will show why this is false and examine why the justification works. In the meantime, we leave you with E.J. Dionne’s summation:
[T]his is a war on a century’s worth of work to keep our air and water clean; our food, drugs and workplaces safe; the rights of employees protected; and the marketplace fair and unrigged. It’s one thing to make regulations more efficient and no more intrusive than necessary. It’s another to say that all the structures of democratic government designed to protect our citizens from the abuses of concentrated private power should be swept away. It’s a very strange moment. Trump and Bannon are happy to expand the reach of the state when it comes to policing, immigration enforcement, executive-branch meddling in the work of investigative agencies … The parts of government they want to dismantle are those that stand on the side of citizens against powerful interests.
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