Reason’s Nick Gillespie interviews law professor Todd Zywicki of George Mason University (and contributor to the Volokh Conspiracy) about an Obama administration initiative that has mostly flown under the radar during the health-care debate. The White House wants to create the Consumer Financial Protection Agency, which will increase regulation on the lending markets and force the creation of “plain vanilla” products that everyone can understand. However, part of the reason mortgages and loans are so complicated is the current level of regulation on the industry — and the cause of the financial meltdown had nothing to do with the complex nature of loans and mortgages anyway.

Is your mortgage confusing to you? Are you bewildered by credit card offers? Do you crave the simplicity of “plain-vanilla” financial vehicles whose complete terms can be read in less than four minutes?

Be careful what you wish for: The Obama administration and members of Congress are pushing legislation that will create a new agency, The Consumer Financial Protection Agency, whose job would be to simplify and police all manner of financial transactions, from what sorts of mortgages could be offered to what sort of credit cards would be in your wallet to whether Wall Street could create new ways of buying and selling stocks. In the name of making your life easier and avoiding the next financial meltdown, the CFPA might just harshly limit how you spend your hard-earned (and dwindling!) dollars.

Keep this in mind when listening to Obama talk about how he will make health care more “efficient.” As Zywicki points out, the CFPA duplicates the Federal Trade Commission, which makes this inherently less efficient. The multiplication of bureaucracies in regulating lenders will do nothing but add to the confusion, both in general and in the specific instances that Zywicki mentions.

It also reinforces another theme from the health care debate, which is that government simply doesn’t want to trust free people with their own choices. In Obama’s world, there are two Americas: victims and exploiters. He sees the role of government as a heavy hammer on the latter. In the real world, though, most people don’t fall into either category, but their liberty and choices will get limited by an autocratic and bureaucratic leviathan which treats as illegal everything not explicitly allowed. And that is simply not freedom. At best, it’s a benevolent despotism.