Dual regulation and the irrepressible human spirit

First, let's be thankful it exists (the human spirit thing that is). Many of our greatest inventions and cures arose from a refusal to say "no."

So why be worried when the Federal Energy Regulatory Commission (FERC) whacks a natural gas trader for $30 million based on a finding that he manipulated the price of natural gas futures (an activity assigned by Congress 40 years ago for policing EXCLUSIVELY by the Commodity Futures Trading Commission) on the New York Mercantile Exchange (also supervised EXCLUSIVELY by the CFTC)? 

FERC's theory appears to be that, whatever the jurisdictional rules, futures markets can affect prices of the real energy product over which it has unquestioned responsibility. So, it can act to get at the source of the problem.

Congress awarded the CFTC sole authority over futures activity precisely because the FERC theory, if embraced, would have allowed other agency's to set their own rules for futures that potentially interact with matters under their wing. Everything from corn to copper to crude oil to commercial paper to catastrophic events would have multiple regulators at the federal, state and local levels.

By my count, at least 60 agencies at the national level alone could claim a seat at the futures policy table.

And they don't think alike. In one recent case where two agencies conducted a joint investigation looking at the self-same documents and hearing the self-same testimony, one agency found two failed attempts to violate the law while the other agency found 12 successful violations.

Who can do business under such circumstances? How does one hope to comport oneself when dozens of varied standards are applied?

Advocates of limited regulation should jump all over this development. Otherwise, even the new Yankee Stadium will be too small to host all of the regulatory wannabes.

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