Thursday, July 22, 2010

Do you know what is in the Bank Bailout Bill?

Technically, it is the Financial Reform Bill. But I don't know what is in the bill, because right now I don't have the time to look into another 2000 page bill. But others do. I am 99.999% sure that most of Congress doesn't know what is in the bill. There is this little gem:
Four members of the U.S. Commission on Civil Rights have signed a letter complaining that Section 324 of the conference report titled the “Dodd-Frank Wall Street Reform and Consumer Protection Act” “includes a section on race and gender that even those who pride themselves on keeping up with national affairs may have failed to notice.” This provision, which can be found on page 172 of the conference report, may lead to unconstitutional racial and gender preferences being forced on financial institutions covered by the new law.

The letter from members of the U.S. Commission on Civil Rights was signed by Commissioners Peter Kirsanow, Ashley Taylor, Gail Heriot, and Todd Gaziano. In the letter these experts in civil rights law explain that the legislation “requires that each covered agency establish an ‘Office of Minority and Women Inclusion’ responsible for ‘all matters of the agency relating to diversity in management, employment, and business activities.’” This law will empower federal bureaucrats to issue rules and regulations governing the financial sector of the economy, if those businesses are doing any work for the federal government.

The Commissioners further argue that these new bureaucrats will be empowered to shall “’develop standards’ for ‘assessing the diversity policies and practices of entities regulated by the agency’ and ‘develop and implement standards and procedures to ensure, to the maximum extent possible, the fair inclusion and utilization of minorities, women, and minority-owned and women-owned businesses in all businesses and activities of the agency.” According to the letter, this new mandate will cover “financial institutions, investment banking firms, mortgage banking firms, asset management firms, brokers, dealers, financial services entities, underwriters, accountants, investment consultants and providers of legal services.” If these institutions are doing business with the government, newly minted bureaucrats will be allowed to study the racial and gender composition of these covered entities work forces to search for companies with not enough minorities and women in a decision making capacity.
Here is another piece about this section which notes
What would be the mission of this new corps of Federal monitors? The Dodd-Frank bill sets it forth succinctly and simply - all too simply. The mission, it says, is to assure "to the maximum extent possible the fair inclusion" of women and minorities, individually and through businesses they own, in the activities of the agencies, including contracting.

How to define "fair" has bedeviled government administrators, university admissions officers, private employers, union shop stewards and all other supervisors since time immemorial - or at least since Congress first undertook to prohibit discrimination in employment.
So, not surprising, the definition of "fair" is going to be in the eye of the beholder. The problem is that the beholder will be a group of unelected bureaucrats who will get to make up the law without any real accountability.

So what will we get? Quotas--make no mistake about it.

Look, I like the idea of minority and women owned business. I believe that the law, however, should be completely neutral on the regulatory front. No rules should be put in place that favor one type of business owner over another, not on race, not on gender, not on anything.

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