Today, Elon and friends shut down the CFPB, the Consumer Financial Protection Board. That saves the Federal Government about $810 million (PDF link) a year. Americans no longer have to pay that money every year! There are 5 employees who do still have to work there because that’s the law, so let’s call it $809.4 million.
There are some pesky looking facts at first glance. It is estimated that the CFPB did save Americans about $20 billion in total, or about $1.4 billion per year. So technically Americans saved money by having the CFPB around, at least on average.
Oh, also, the savings are much bigger than that. See, that’s just money they have directly returned to Americans. Then there are the additional savings from regulations they have put in place to prevent onerous payday lending fees, Their rule to close the Overdraft Fee Loophole would save another $5 billion or so per year. Add in the rule to cap credit card late fees and you get another $10 billion per year. Payday lender rules would save even more.
So American taxpayers saved $810 MM, but assuming these rules disappear (or are no longer enforced) they will pay about $16 billion more in fees and fraud and other financial problems. That’s a savings of … negative $180 for each family in America! Straight into their pocket. Er, out of their pocket.
But the genius is that there are more pockets! That $16 billion goes straight into the pocket of financial firms that can charge exorbitant fees again, or just plan commit fraud! Woo hoo!
Would you be surprised if I told you that financial stocks were the biggest gainers on the stock market today?
(Source: Bloomberg)
Back to the genius. Corporations get to keep that extra money as profit. And some they will give straight back to the government as taxes! (Though not as much as you think.) Their stock price will also go up with increased profits. And they can even decide to donate some of the new windfall to politicians, and maybe even Elon! Like a thank you gift. It’s genius.
Remember those ads on TV where “For just $15 a month, you can sponsor a child in need?” Well, that’s exactly what’s happening here! For just $15 a month, your family can sponsor a mega financial corporation in need of endless profit growth. And no one will complain, because it’s not like it’s a tax increase. It’s just an invisible tax, and who’s going to protest that?
Genius.
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