9:45 AM EDT, July 20, 2011
It's important to remember that ideological myths were one cause of the economic collapse, especially myths about regulating special interests.
Politicians who receive money from Wall Street, the oil and gas industry and others justify the protective corporate welfare given their benefactors by invoking ideological doctrines such as those that insists that all government regulation and taxation is inherently bad.
Only by leaving special interests to their own devices, the ideologues claim, will the "trickle down" benefits come to those of us who don't have our own lobbyists
Bernie Madoff destroyed thousands of lives and billions of dollars, and the Securities and Exchange Commission, the regulatory body charged with protecting individuals from this type of fraud, had been told repeatedly what Mr. Madoff was doing years before he was exposed.
But because the SEC answered to an administration that both discouraged and underfunded consumer protection, the agency failed to perform its duty.
A second example suggests history is repeating itself. The recent Dodd-Frank legislation was passed to prevent fraud and corruption in the financial services sector of the kind that nearly caused the economy to collapse in 2008.
But the GOP-dominated House Appropriations Committee is now cutting $222 million from the SEC's budget, just as its responsibilities for enforcing the Dodd-Frank act increase.
Republicans say the cuts are needed to reduce the budget deficit and the size of government. But the fact is, starving the SEC doesn't lower the deficit, it increases it.
That's because the SEC isn't funded by taxpayers but by fees it collects from the financial industry. So reducing the effectiveness of the SEC will cost taxpayers millions in lost penalties, fees and recoveries.
If America is to compete in the 21st century, we can no longer tolerate the substitution of ideological myths for facts — be it in economics, the role of government or consumer protection.
Roger C. Kostmayer, Baltimore
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