April 4, 2016
On Wednesday, the Labor Department plans to unveil new regulatory restrictions against brokers, insurance agents, and other who service 401(k)s and individual retirement accounts (IRAs). That means less access to financial advice and fewer options for a secure retirement for middle class investors. Who thought that was a good idea?
The Obama administration thinks people aren’t smart enough to seek out and discern good investment advice. When the Labor Department first proposed its so-called fiduciary rule last April, it explained that individuals cannot “prudently manage retirement assets on their own,” and that they “generally cannot distinguish good advice, or even good investment results, from bad.” That paternalism was the administration’s justification for some pretty draconian restrictions.
The rule puts a big burden on professionals who service 401(k) plans and...
March 18, 2016
AUSTIN, TX—President Obama traveled here to the ongoing South by Southwest festival from Washington, D.C., and so did I. In his March 11 presentation, he said, “The reason I'm here really is to recruit all of you.” Recruiting the tech and entertainment savvy attendees of SXSW, as it is called, was one of my purposes too.
But the differences at what has become one of the premier festivals for music, film and technology, ended there. President Obama’s speech was a defense of big government in all its forms. He sang the praises of the Consumer Financial Protection Bureau and wondered aloud why left and right complain that Dodd-Frank hasn’t reined in Wall Street.
The reason is called reality. Big banks have gotten bigger since Dodd-Frank, while the...
February 12, 2016
In my debut column as a Forbes contributor, I celebrate George Washington’s birthday by telling the story of how he championed early American inventor James Rumsey, and in so doing, played a pivotal role in developing the steamboat. As I note in the piece, the steamboat can be called America’s first great invention and “disruptive technology”:
In 1787, two events changed the course of history in America—and the world. And George Washington, who two years later would become the first U.S president, would play an indispensable role in both.
One was, of course, the drafting of the U.S. Constitution to safeguard our liberties and create a federal government checked by separation of powers. The other less well known event concerns a mode of transportation that would not come into fruition until the next century: the...
February 4, 2016
Cronyism and boondoggles in an energy bill is nothing new in the U.S. Congress. But this week, senators of both parties are taking the process to new lows in amendments they are offering to the pending S.2012—the Energy Policy Modernization Act.
Not only are these politicos picking winners and losers through subsidies and mandates favoring selected “green” industries and technologies, they are roping in housing and finance agencies into their “environmentally correct” schemes. At best, this would divert the agencies away from their missions at a time of great economic volatility. At worst, it could cause a financial crisis of its own.
First, there is an amendment from Sen Johnny Isakson (R-Ga.), a former real estate agent, which would loosen credit standards for “green” homes...
January 11, 2016
On Tuesday evening, President Obama will give his final State of the Union address. In evaluating the state of the U.S., it’s useful to look at the state of economic freedom, including the ability for ordinary Americans to start and invest in a new business without undue government interference.
By several measures, economic freedom has declined rapidly since 2009. Though some harmful policies were enacted in during the Bush administration, such as the Sarbanes-Oxley accounting mandates that made it so much more difficult smaller companies to go public, the Obama administration has not reversed those policies and pushed through many new detriments to economic freedom. These include Obamacare, which makes it difficult for small and midsize firm to hire new employees to due to the expensive and prescriptive insurance coverage mandates, and the Dodd-Frank “financial reform,”...
December 29, 2015
As 2015 comes to a close, it’s time for year-end retrospectives, in which the past year is proclaimed the “year of” something. So in that spirit, I declare 2015 to be the Year of Equity Crowdfunding. Some proclaimed 2012 the “Year of Crowdfunding. But 2015 has been the year that regulatory barriers to equity crowdfunding slowly but surely began to fall at the state and federal level.
As I explain in my rcent paper, “Declaration of Crowdfunding Independence,” significant regulatory roadblocks – including laws more than 80 years old – have stopped entrepreneurs...
December 16, 2015
My Competitive Enterprise Institute colleagues and I have made the case for members of Congress to use the omnibus spending bill as an exercise of its “power of the purse” to hold the Obama administration accountable. Unfortunately, negotiators in Congressional leadership opened that purse way too soon and way too wide to give President Obama nearly everything in terms of the spending he wanted while inexplicably leaving out regulatory relief measures that members of both parties were clamoring for in the thousand-plus page omnibus bill (read it here) to be voted on later this week.
While there were a couple good measures like lifting the oil export ban and repealing the expensive and...
December 15, 2015
As the year-end omnibus spending bill is about to be unveiled, there will be a scramble to examine its provisions. In many policy areas, my colleagues and I have urged Congress to use its “power of the purse” to insist on significant regulatory relief as a price for the new spending in the omnibus.
I have written that Congress should freeze funding for the Department of Labor’s (DOL) “fiduciary rule,” referred to by many as “Obamacare for your IRA,” which would greatly limit investment choices in IRAs and 401(k)s and even restrict what financial broadcasters like Dave Ramsey could say to listeners.
Defunding of this rule was also urged by a ...
November 30, 2015
It is indeed sad that 40 percent of millennials favor the government banning speech that some deem offensive, according to a recent Pew poll. Even more distressing is that college students have plenty of company with members of other age groups and professions who want to shut down speech they disagree with.
Take speech about personal finance. This is an area where there would certainly seem to be room for a diversity of opinion, given the complexity of the topic and differences in individual financial goals and circumstances. That’s why there is no shortage of books and radio and television shows with differing viewpoints about financial planning. If you don’t subscribe to what Suze Orman or others have to say, you can always read or tune in ...
November 12, 2015
The behemoth Consumer Financial Protection Bureau (CFPB) played a big role in Tuesday night’s GOP presidential debate on Fox Business, both during the commercials and in the candidate’s answers.
A new ad by American Action Network that made its debut during commercial break correctly linked the CFPB—created by the Dodd-Frank so-called financial reform act rammed through Congress in 2010—to denial of mortgages and car loans due to the CFPB’s costly and paternalistic rules that hit Main Street bank and credit unions. The candidates critical of Dodd-Frank dinged those same policies, but often without naming the CFPB.
Carly Fiorina called out the CFPB directly and for another disturbing policy. She pointed out that...