STEP 3: IF YOU CAN'T WIN, STALL
You might think otherwise, but it doesn't naturally follow that
because a law has been passed by Congress and signed by the president,
said law actually has to be implemented. With Dodd-Frank, the SEC took a
brilliant approach to submarining one of its own regulations. The
agency was supposed to begin enforcing the new proxy access rule by late
2010. Instead, in October 2010, it granted speculators a last-minute
stay – essentially giving the Chamber of Commerce time to prepare its
lawsuit to permanently kill the rule.
Position limits are another example. Dodd-Frank ordered the CFTC to
begin enforcing the new rule no later than January 17th, 2011. But
January 17th came and went, and – no position limits! Gary Gensler, the
head of the CFTC and a former executive of Goldman Sachs, then announced
that he hoped to implement the rule by September 2011. But September
came and went, and soon it was 2012, and before you knew it, the CFTC,
like the SEC, was in court, facing a lawsuit that would permanently kill
the rule.
Even the president got into the stalling game. During the year of
nonaction on position limits, the "disease that did not exist" – energy
speculation – returned to ravage the American gasoline market. In the
winter of 2011, oil soared above $100 a barrel, despite fundamentals of
supply and demand that would have suggested a price drop. Obama blasted
fuel speculators for the price hike and announced that he was creating
the Oil and Gas Price Fraud Working Group to "root out any cases of
fraud or manipulation in the oil markets." He added, in stern and
stirring tones, "We're going to make sure that nobody is taking
advantage of American consumers for their own short-term gain."
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