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SEC commissioner attacks mild financial reforms as a "firing squad on capitalism"

Michael Piwowar appears before the Senate Banking, Housing and Urban Affairs committee on Thursday, June 27, 2013, for his nomination hearing to be a member of the Securities and Exchange Commission.
Michael Piwowar appears before the Senate Banking, Housing and Urban Affairs committee on Thursday, June 27, 2013, for his nomination hearing to be a member of the Securities and Exchange Commission.
Rod Lamkey Jr./MCT via Getty Images

Set up by the Dodd-Frank financial reform act of 2010, the Financial Stability Oversight Council (FSOC) is a coordinating body of various financial regulators charged with monitoring large, "systemically important" financial institutions and identifying potential risks arising from them. It has come in for a considerable amount of (often justified) criticism since its creation. As Mike Konczal noted as the bill was being written, the FSOC has a de facto veto over the Consumer Financial Protection Bureau, weakening that agency. Current and former Fed vice chairs Stanley Fischer and Donald Kohn (respectively) have both argued that FSOC is insufficiently strong and independent to adequately improve financial stability. Both the financial sector and financial reform advocates have knocked the council for excessive secrecy.

But I've got to say, SEC commissioner Michael Piwowar's criticisms of FSOC at an American Enterprise Institute event yesterday aren't ones I've heard before:

In preparing for this speech, I thought a lot about what moniker I could use to best describe the FSOC. The Firing Squad On Capitalism. The Vast Left Wing Conspiracy to Hinder Capital Formation. The Bully Pulpit of Failed Prudential Regulators. The Dodd-Frank Politburo. The Modern-Day Star Chamber. You get the point. There are countless terms I could use that are appropriately pejorative and at the same time entirely accurate. For the sake of clarity, I will stick with references to the two official nicknames of the FSOC – the "Council" or the "Unaccountable Capital Markets Death Panel."

For the record, nothing in the Dodd-Frank act authorizes or implements worker and/or state ownership over the means of production or otherwise effects the end of capitalism. Piwowar does deserve plaudits for a stellar allusion to Tudor/Stuart-era Britain's Star Chamber. He could have just called FSOC a kangaroo court and gotten the same meaning across, but he really went the extra mile here.

Piwowar was appointed to the SEC last year by President Obama; the SEC is required to have no more than three of its five commissioners come from the same political party, and Piwowar was picked to fill a Republican slot. Still, one has to imagine there were plausible Republican picks for the position who don't think the federal financial regulatory apparatus is a threat to capitalism itself.

Hat-tip to Elias Isquith.