Most people have probably heard about Mick Mulvaney’s seizure of the Consumer Financial Protection Bureau (CFPB) as Donald Trump’s appointed “acting director.” They probably don’t realize quite how outrageous this move is.
First, it is worth noting that Mulvaney openly holds the CFPB in contempt. When he was still in the House of Representatives, he referred to it as a “joke.” Mulvaney has made it clear that he would be happier if the CFPB did not exist. Appointing him as acting director is a bit like selecting a hardcore atheist as the next pope.
It is also worth placing the CFPB in a larger economic context. The CFPB’s general purpose is to protect people who are less financially sophisticated from predation by the financial industry. While it does perform this purpose, it also is working to make the financial industry more efficient, insofar as it succeeds in this effort.
Remember, the economic purpose of the financial industry is allocate credit to those who need it. In principle, we want to use as few resources as possible in this process. If we only need 1 million people rather than 2 million people to issue and service loans and perform other financial operations, then we have freed up a million people to work in health care, education or other productive sectors of the economy.