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A Shield for Incumbent Power

Billed as a way to protect the public, Consumer Financial Protection Bureau diverts attention from Congress’s spending addiction

President Obama’s Consumer Financial Protection Bureau is more like an Incumbent Politician Protection Agency, argues Nicole Gelinas in City Journal.

Although its mission is to protect consumers from banks and financial institutions, Gelinas argues that the “CFPB may do for credit cards and other financial products what the government did for mortgages: make the poor think that borrowing lots of money is perfectly reasonable. The CFPB, in sum, is Washington’s new weapon in its war for more debt.”

It’s a good weapon, because the bureau’s leaders, good demagogues that they are, are adept at stirring people up against the evil banks, especially on the topic of overdraft charges. Surely, we need the federal government to protect us from overdraft fees. It’s so hard to keep an eye on your checking account!

The bureau also appeals to financially struggling people by talking about regulating private student loans—even though most people with student loans are indebted to the government. Using this populist argument, they make it seem like the administration is looking out for the people, while not actually addressing the debt problem that is plaguing America. In fact, they are encouraging it: It’s a new deal between the federal government and the people:  “We’ll make sure you don’t suffer the just repercussions of excessive spending, so long as you don’t make us suffer by voting us out! If you want to overdraw your account, go for it! We won’t let the banks take our money, so long as you keep letting us take your money!”

As Alexis de Toqueville predicted, the American republic will last until the day when Congress realizes it can bribe the people with the people’s money. Why’s that? Because when politicians who love power realize the only way to stay in power is to spend, they’re going to spend and spend and spend until there is nothing left.

And as Gelinas writes, “Congress has created a shield for itself, a useless and destructive agency that it can point to when the public justly blames it for failing to fix our ongoing economic problems.

Will the public see beyond the illusions and tricks?

Read more at City Journal (4 pages).

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