Thursday, March 5, 2015

Death by A Thousand Cuts

A few years ago, I wrote a post for this blog titled, Death by A Thousand Cuts which highlighted the proliferation regulations on the mortgage industry that were shuttering thousands of small companies and forcing independent loan originators to work for bigger companies.

For over five years we have seen more and more regulation crush American business.  In the mortgage industry, this really started with the "new" good faith estimates in 2010--which now are about to be completely revised again just five years later--and the compensation rules of 2011.  But when the Dodd Frank Act was passed in 2010, it created a framework on which to hang endless regulations for all types of financial service companies.  In November of 2013, even the proponents of Dodd Frank (the NY Times) were reported that the law was creating 42 words of regulation for each word of text.  And we have been told repeatedly by Massachusetts Senator Elizabeth Warren and her socialist cohorts that these regulations are necessary to protect consumers and keep the economy safe from another crash.

I was surprised, therefore, to see someone else using the "death by a thousand cuts" analogy today.  This is not a fellow financial services professional, or a blogger, or even a conservative politician.  Today the individual speaking out against over regulation of the financial services industry is none other than the SEC commission Daniel Gallagher. 

Gallagher is not pulling any punches about the costly and negative impact of the excessive regulation on financial service firms.  To make his point, he has created a startling graphic to demonstrate the impact of regulations on financial service firms since 2010. 

To see a bigger version of this picture click here

Gallagher is very frank about the impact of over regulation and the real cost of regulatory burdens.   "No regulator, as far as I know, has considered the overall regulatory burden on financial services firms when determining whether to impose additional costly regulations," Gallagher told Mortgage Professional America. "We as regulators are, when it comes to the possibility that our rules are causing death by a thousand cuts, the proverbial ostrich—head firmly entrenched in the sand."

MPA goes on to quote Gallagher, "The stakes here are considerable: regulatory burdens divert capital away from the real economy—this acts as a barrier to entry for new market participants and further entrenches those institutions that are increasingly 'too big to fail.'"  

Gallagher says that he had his staff create the graphic to help the public understand the real impact of rule making over the last 4.5 years adding that he hopes it can spark public debate on the very serious issue of over-regulation and its impact on all of us.

Every once in a while, a federal regulator gets it right.  I applaud Gallagher for raising this issue and illustrating it so profoundly.  I hope that the country will wake up to what is happening in our country.

Alexandra Swann is the author of No Regrets: How Homeschooling Earned me a Master's Degree at Age Sixteen and several other books. Her novel, The Planner about an out of control, environmentally-driven federal government, is available on Kindle and in paperback. For more information, visit her website at

Sunday, March 1, 2015

An Open Letter to John Boehner and the U.S. House of Representatives and the U.S. Senate on DHS Funding

Dear Speaker Boehner and Senate Majority Leader McConnell and the Members of Both Houses:

I write this open letter today to remind you that all of us who vote in every election do so to uphold and protect the system of government guaranteed by our Constitution--a system based on laws properly made through the legislative branch of the government and implemented through the executive branch.  Over the past six years we have seen this system steadily eroded as the executive branch has seized more and more power away from weak members of the other branches of government.  Last fall, when we voted you into your present majorities, most of the American people who did vote did so with one purpose in mind--to stop this slide towards lawlessness and to reinstate the checks and balances system of government.  We gave you all of the tools that you needed to be an effective check on executive power.  So my question to you now is, why are you once again abdicating your responsibilities by refusing to stand up to the president's latest unlawful action?  Why are you so willing to once again hand over your power by passing a "clean bill" to fund DHS? And why are you whining that it is too late to stop this--that the best chance was at the end of the last session when the budget was passed?
Lest you forget, the budget deal was passed while Harry Reid was still Senate Majority leader.  Under his supervision there was NO chance of defunding amnesty or of stopping any of Obama's other flagrantly illegal acts.  That's why we elected you.  You have a chance now to actually do something about this, and yet you are once again waffling.
For those of you, and I know there are many, who are actually in support of amnesty, who actually are listening to the myriad corporate voices telling you that America needs its undocumented immigrants, that business relies on the work of undocumented immigrants, and that Hispanics will never vote for you again if you defund DHS, I have just one word for you: "STOP."  As a four decade long resident of a community which was 85% Hispanic I can tell you with reasonable certainty that Republicans will never have a majority of the Hispanic vote no matter what they do. Hispanics who are interested in free enterprise and upward mobility without government help will find you on their own.  But Hispanic countries are by and large socialist countries with socialist mindsets.  Most of the immigrants from these countries believe in a big safety net even if that big net means that most of the people live in poverty.  In this at least Ronald Reagan and all of those who have come after him were wrong--Hispanics are not  a natural voting block for the Republican party, and they never will be. The sooner you admit that, the sooner you can stop chasing votes you are never going to get.
However, the bigger issue here is not whether Hispanics can be converted to the GOP or not.  The question is not whether the U.S. Chamber of Commerce supports amnesty (it does).  The question is not even whether it is morally right or financial expedient to deport people who have lived in this  country for decades and have children who are citizens.
The real issue here is the overreach of power by President Obama.   The question you all need to be asking yourselves this week is not "How do we resolve the issues of immigration?" but rather, "How are we going to respond to the problem of executive overreach?"  That second question is the ONLY one you are answering right now.  Funding an executive order to legalize between 4 and 7 million people not only rewards the illegal behavior by those who broke our laws to enter this country; it also rewards the president's illegal behavior.  By funding this initiative, you are saying that Obama does have the right to use his pen and his phone to do whatever he pleases.  You are abdicating your authority and responsibilities as a co-equal branch of government.  And you are betraying the people who elected you to stop this nonsense.
On Thursday many Americans, including me, took time to call the offices of various Senators to ask them not to vote for any bill that would fund amnesty.  By the time I was finished with my phone calls I was finding offices that had their answering machines on because of the volume of calls.  (Senator Marco Rubio's office had a message that the office could not receive any more calls because the voice mails were full.)  I was encouraged; I knew that my fellow citizens were on the phones letting you know what WE think about all of this.  And lest you forget the lessons of the last six years, we voted you in to stand up to Obama.  If you fail to do the job we elected you to do, we can just as easily vote you out.  We hired you and we can fire you.
I hope that you will take the time to think seriously about your responsibilities to the United States, and your responsibilities to the people who elected you.  I hope that you will consider the precedent you are setting right now if you do not uphold the systems of checks and balances.  I would rather see the Department of Homeland Security permanently shut down and all of its agents in the private sector than to see one penny allocated to support this illegal initiative.  Shut it down and leave it shut down--for the next two years if you need to.  We have enough law enforcement in this country without it.  But don't think for one minute that you can fund this and then tell us you had no choice.
It's time to stand up and do the job you were elected to do.
 Alexandra Swann is the author of No Regrets: How Homeschooling Earned me a Master's Degree at Age Sixteen and several other books. Her novel, The Planner about an out of control, environmentally-driven federal government, is available on Kindle and in paperback. For more information, visit her website at