In the Washington Post, David Ignatius writes about the long-run economic costs of mortgage bailouts, which infantilize voters. Through bailouts, we are “creating a system of transfer payments that shifts money from the smart to the stupid, from the lucky to the unlucky. Well-managed banks that controlled their risk levels will subsidize poorly managed ones that didn’t; prudent homeowners who decided not to take the interest-only refinancing loans will subsidize imprudent ones who did.” (Most Americans oppose mortgage bailouts, as do many at CEI).
Ignatius also notes that “the last round of crisis-driven regulation — the Sarbanes-Oxley legislation that followed the Enron scandal — created more busywork for accountants than real protection against abuses.”
CEI is helping challenge the devastatingly-costly Sarbanes-Oxley law in court, arguing that the regulatory agency it set up violates the Appointments Clause of the Constitution and separation-of-powers safeguards. The court case is called Free Enterprise Fund v. Public Company Accounting Oversight Board. FEF v. PCAOB will be argued before the D.C. Circuit Court of Appeals on April 15 at 9:30 a.m.