The war on financial regulation

If you’ll recall, the post-Enron-scandal accounting laws and regulations were passed to guarantee that corporations accurately report their assets, liabilities, income and costs.

But as soon as the “mark to market” rule forced banks to reveal how shaky their assets were, and reduced banks’ ability to lend money as a result, Congressman Barney Frank last year told the accountants to ignore the regulation.

Result: Banks are allowed again to make shaky loans based on shaky assets. Barney Frank is good at that game.

Retiree subsidy. Now, with the passage of the costly health-care law, companies like AT&T, Verizon, Caterpillar and John Deere are required, under other provisions of the accurate-accounting regulations, to tell their stockholders that the new law substantially reduces a federal subsidy to their retirees' health care benefits. They’ve announced that, because of the lost subsidy, the health-care law will cost the companies hundreds of millions of dollars a year.

With that, Congressman Henry Waxman demanded the CEOs of AT&T, Verizon, Caterpillar and John Deere come to Washington to explain why they told the truth.

The war on financial regulation continues.

Frank Warner