President Obama nominated Richard Cordray to head up the new Consumer Financial Protection Bureau, which was created in the controversial Dodd-Frank bill. Today, Senate Republicans blocked that nomination, and President Obama has responded with a typically demagogic speech blaming the lack of regulation for the economic meltdown.
He’s right in a sense, but as usual, for the wrong reasons: The lack of oversight of Fannie Mae and Freddie Mac by the Democrats who ran it led to the meltdown. And the Democrats in Congress were the ones who stood in the way of that oversight. This is common knowledge. Surely the president is aware of the facts, but chooses to ignore them.
Cordray appears to be well qualified for the post. But the agency is the real problem, writes Sean Hackbarth at the US Chamber of Commerce blog. When the Democrats created the CFPB, they put virtually no checks on its power. Very little congressional oversight. Whoever occupies the top of that agency therefore has nearly unlimited power. And the president refuses to sit down with Congress and come up with reasonable limits on the agency’s powers.
We’ve recently seen how largely unchecked agencies like the NLRB and EPA can run amok, damaging the US economy. There is no good reason to create yet another powerful agency, with even less accountability to the voters. There never will be a good reason to do that.
The Republicans have no choice but to block Cordray, and anyone else the president appoints to head the agency, until that agency’s powers can be checked and its operations overseen by Congress.