When your second-grader’s class stages “Macbeth” at parents’ night, you’re torn between admiring the effort of the kids and worrying that the teacher is unhinged.
So it was when Rep. Patrick T. McHenry, the North Carolina Republican, chaired a hearing called “The Growth of Financial Regulation and Its Impact on International Competitiveness.” Vanity prevailed over good judgment when the Oversight and Investigations unit of the House Financial Services Committee took this up Wednesday.
Even the big-thinking McHenry must have noticed that the performance was falling short of the ambition.
Missouri Democrat Emanuel Cleaver II, for example, decided the best way to explain financial regulation and international competition was to talk about his days playing football. Cleaver said he lived for the chance to “put your helmet into” a running back or receiver. Those days are gone. “It’s been outlawed,” he said. “You can’t even trip anymore. You pamper the quarterback.”
What all the new football prohibitions added up to in Cleaver’s mind is that nobody should complain about a little financial regulation even if it has international consequences.
“We don’t accommodate the Europeans, Asians and Africans in what they call football and we call soccer,” Cleaver said. What that comment added up to was less clear, but a case can be made for losing the plot.
McHenry gamely attempted to draw attention from Cleaver to himself by taking that moment to bring up NASCAR racing.
Pennsylvania Republican Michael G. Fitzpatrick raised a worry about retaliation by foreign regulators. This seemed like another member of the cast not following director McHenry’s vision. If U.S. financial regulations are so onerous that U.S. institutions are becoming less competitive internationally, why bother to retaliate? Wouldn’t foreign regulators be better off telling the U.S. what a fine job it’s doing? They would cover up the mouthpiece on the phone while they snicker to one another in the background.
McHenry used his opening monologue to warn of global regulatory arbitrage, anemic economic growth, weak job creation and the imperative to view the regulatory framework in a large, global context. But he didn’t do much better than his colleagues when his big interrogation moment arrived. He focused his questions on crowdfunding and the rules the Securities and Exchange Commission has proposed to govern it.
Crowdfunding is raising capital through the Internet and social media, often from large numbers of investors contributing relatively small amounts. Many think it has a very promising future, but putting it at the center of a hearing about the international consequences of financial regulation is like thinking that "Macbeth" is about Scotland’s military conflict with Norway.
Pennsylvania Republican Keith Rothfus sensed the totality of the subject and wondered whether the sheer complexity of regulations could slow economic growth. One of the witnesses offered a brief reply that it could.
“We’re going to have to leave it at that,” McHenry said.
Somebody may have to speak to the school principal before the next performance.