Bloomberg View has an editorial complaining of "foolish" congressional "stinginess" when it comes to funding the Securities and Exchange Commission. "Under the 2014 spending agreement, the Securities and Exchange Commission will get $1.35 billion, which is $324 million below President Barack Obama's budget request," the editorial says. "With such tight-fisted budgets, the industry will get exactly what it pays for -- regulators who must work nights and weekends to keep up, resulting in morale problems. Even worse, the agencies won't be able to recruit the best and brightest."
Here is some context missing from the Bloomberg View editorial, courtesy of a New York Times news article:
by several measures, the S.E.C. is far from starved for money. Its $1.1 billion budget in 2010 was 15 percent higher than the $960 million it received the year before — and nearly triple its $377 million budget in 2000.
Representative Spencer T. Bachus, the Alabama Republican who is chairman of the House Financial Services Committee, said last week that the tripling of the S.E.C.'s budget occurred in a period that included some of the agency's biggest failures — the Ponzi schemes of Bernard L. Madoff and R. Allen Stanford and the collapse of Bear Stearns and Lehman Brothers.
Last September, H. David Kotz, the inspector general, reported that a lack of adequate policies led the agency to make lease payments that could have been avoided, including more than $15 million for space in Manhattan that no S.E.C. employees have occupied in the last five years.
The Bloomberg View editorial is a great example of misleading framing. Compare the SEC budget approved by Congress to President Obama's inflated budget request, and it looks "stingy." But compare it to what the agency was spending in 2000, and it looks lavish.
The editorial suggests making the SEC and the CFTC "self-funded," but it doesn't deal with the Constitutional issues or the practical dangers that brings.
And the bit about how regulators "must work nights and weekends" is pretty rich. Don't the people on Wall Street work on nights and weekends? Doesn't anyone at Bloomberg, L.P.? Certainly New York City police and firefighters did when Michael Bloomberg was mayor. Why should the private sector, or lower-paid public employees, for that matter, be taxed so that relatively well-paid SEC lawyers — at least 103 SEC employees make $225,000 a year or more — can avoid the "morale problems" of night or weekend work? Sometimes night and weekend work can be good for morale because it is a bonding experience. It's just an all-around ridiculous editorial.