We are familiar with the tragedy of trees crushing people during severe storms. But can processed pulp (paper) do the same to a pending proposal at the Commodity Futures Trading Commission (CFTC) regarding the extraterritorial application of the Dodd-Frank Act? The experiment is underway as CFTC staff wades through a veritable mountain of comment letters received from around the globe, much of them opposed.
In fairness, the CFTC itself has resorted to massive tomes to explain its various Dodd-Frank initiatives. What's good for the goose . . . And yet, I mourn the ravaged forests that were felled to feed both sides in this dispute. The same lumber might have been used to build shelters for the homeless or put to some other noble purpose.
The issue at stake is a simple one. Might financial activity abroad endanger the domestic economy? It can. If so, how can we protect ourselves without imposing our own requirements upon offshore jurisdictions? We can't.
But, wait a minute! Other nations have (in addition to sovereignty) their own regulatory structures. Not all are as advanced (read: complex) as ours but, after the 2008 financial crisis, many major countries are beefing up their programs and they should be operational "pretty soon." God bless them but delay is a very risky strategy.
The Eurozone is a mess, our own economy is limping along, and many governments (including our own) are dysfunctional. Time alone will not heal the situation.
The CFTC's release on the subject cites many instances where overseas troubles not only washed back on our shores but required the American taxpayer to pay about a trillion dollars to stanch the bleeding, a significant portion of this largesse going abroad. Act II could happen at any time. Can we afford to wait?