One area, not mentioned in Jim’s post on the GAO study on government waste, in which federal programs overlap each other is financial regulation.
Eric Falkenstein notes that the new Consumer Financial Protection Bureau created by the Dodd-Frank financial regulation bill shares all or parts of its mission with the SEC, CFTC, Fed, FDIC, OCC, OTS, and OFHEO:
Thus far the CFPA has merely highlighted they will be at least as bureaucratic as any other agency, as they note their mission to educate the public (I can’t wait for their The More You KnowTM adverts make TV), community affairs (surely essential), research (you can never have enough government research), Fair Lending and Equal Opportunity (which led to the last boondoggle), and tracking complaints (the old suggestion box, something that existing agencies could never have accommodated). Their first step will probably either be really lame (eg, adding places to initial on mortgage applications), or really destructive (making something consumers want illegal, thus driving it to less scrupulous markets as in pay-day lending).
There are some good things regulators can do, as when they outlawed Lawn Darts. In this case, they could not just allowing but requiring hedge funds to provide their returns and assets under management, so that investors are not duped into some fad based on selectively hinted returns released to the press and repeated by unskeptical reporters. They could also take over the job of monitoring the performance of the rating agencies, so that there’s a consistent and unbiased set of data on what various ratings mean (currently, the agencies do this themselves, and often do not report sub-categories like munis, government debt, or asset-backed securities). Yet, I’m sure other agencies have the ability to do these things, and for some reason do not, so I’m not optimistic.
My guess is they will simply give their agency some sort of sign-off authority, which will make them feel important, and not do anything but cost money. It could be worse.
Falkenstein is writing, partly, in response to former World Bank chief economist Simon Johnson, who calls Republicans’ statements on the CFPB “disinformation” even though all the quotes he provides are accurate.