Chris Dodd, Barney Frank, and Barack Obama insist that the new financial regulation bill pending a vote in the Senate is a necessity to restore stability to troubled markets. Instead, it looks as though Democrats have been more concerned about quota systems than economic growth. Buried deep within the bill is a requirement for all regulatory agencies with jurisdiction in economic arenas to start beancounting based on ethnicity and gender, as Diana Furchtgott-Roth discovered:
In addition to this bill’s well-publicized plans to establish over a dozen new financial regulatory offices, Section 342 sets up at least 20 Offices of Minority and Women Inclusion. This has had no coverage by the news media and has large implications.
The Treasury, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the 12 Federal Reserve regional banks, the Board of Governors of the Fed, the National Credit Union Administration, the Comptroller of the Currency, the Securities and Exchange Commission, the new Consumer Financial Protection Bureau…all would get their own Office of Minority and Women Inclusion.
Each office would have its own director and staff to develop policies promoting equal employment opportunities and racial, ethnic, and gender diversity of not just the agency’s workforce, but also the workforces of its contractors and sub-contractors.
What would be the mission of this new corps of Federal monitors? The Dodd-Frank bill sets it forth succinctly and simply – all too simply. The mission, it says, is to assure “to the maximum extent possible the fair inclusion” of women and minorities, individually and through businesses they own, in the activities of the agencies, including contracting.
Well, this just applies to the government itself, right? These 20 agencies won’t intrude on the private sector, so there’s nothing to worry about. Not exactly:
Lest there be any narrow interpretation of Congress’s intent, either by agencies or eventually by the courts, the bill specifies that the “fair” employment test shall apply to “financial institutions, investment banking firms, mortgage banking firms, asset management firms, brokers, dealers, financial services entities, underwriters, accountants, investment consultants and providers of legal services.” That last would appear to rope in law firms working for financial entities.
Contracts are defined expansively as “all contracts for business and activities of an agency, at all levels, including contracts for the issuance or guarantee of any debt, equity, or security, the sale of assets, the management of the assets of the agency, the making of equity investments by the agency, and the implementation by the agency of programs to address economic recovery.”
This latest attempt by Congress to dictate what “fair” employment means is likely to encourage administrators and managers, in government and in the private sector, to hire women and minorities for the sake of appearances, even if some new hires are less qualified than other applicants. The result is likely to be redundant hiring and a wasteful expansion of payroll overhead.
The media has been analyzing this bill for weeks as it moves fitfully to a floor vote. Yet none of the reports covered Section 342, which has far-reaching impact into the capital markets and banking system. It effectively puts affirmative action into every financial transaction and gives the government a huge opening for interfering with economic growth on the basis of bureaucratic whims. Anyone who has dealt with an EEOC issue will understand the arbitrary interventions this will create — and the damage it will do when every contract and trade can get suspended based on a complaint or even suspicion of violation.
Anyone interested in system stability would have struck these requirements the moment they first appeared. This is a disaster in the making, and yet another indication that Democrats want to exploit the financial collapse for their goals in social engineering. (via The Corner)