William K. Black | The Assault on the Already Crippled SEC and CFTC Will Increase "Control Fraud"

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William K. Black | The Assault on the Already Crippled SEC and CFTC Will Increase “Control Fraud”

William K. Black | The Assault on the Already Crippled SEC and CFTC Will Increase “Control Fraud”

By William K. Black

The SEC and the CFTC’s budgets are not provided by the federal budget. The agencies, as with the federal banking regulatory agencies, are funded by user fees. None of these agencies’ budgets contribute to the deficit. When these agencies fail to stop epidemics of “control fraud” the result can be a Great Recession and trillions of dollars in increased deficits. The asymmetry is so stark that anyone serious about deficits would make ensuring the effectiveness of the SEC, CFTC, and the banking regulatory agencies among their greatest priorities. Supposed deficit hawks in the House are also among the strongest proponents of cutting the SEC, CFTC, and banking regulatory agencies’ budget even though this cannot have any positive effect on deficits and is exceptionally likely to produce the next financial and economic crisis that will produce the next sharp increase in the federal deficit. This is significantly insane, and it is even more insane that no one seems to call them on their insanity.

The purported logic for slashing the SEC and CFTC budgets represents another form of insanity. The logic is that the SEC and the CFTC failed to prevent the epidemic of accounting control fraud that drove the current financial crisis, the Great Recession, and the growing budget deficit. That is true, but proves the opposite. The SEC and the CFTC failures were self-fulfilling prophecies by kindred ideologues of those now seeking to slash the SEC and CFTC budgets.

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CONTROL FRAUD | ‘If you don’t look; you don’t find, Wherever you look; you will find’ -William Black

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