Unsafe at any cost

THERE ARE substantially fewer vehicle fatalities per miles driven today than in 1965, the year Ralph Nader published "Unsafe at Any Speed."

Much of the credit for this goes to the National Highway Traffic Safety Administration, the federal agency tasked with protecting consumers from exploding, runaway or otherwise defective automobiles.

More recently you may have heard from Nader that the failure of Toyota to address a long-known problem with sticky accelerators is in part the result of a highway-safety agency weakened by decades of "deregulatory mania" in Washington.

At least there was a consumer protection agency for cars to begin with - but when it comes to financial products, there is no federal watchdog looking out for the consumer.

And in the absence of such protections, "innovative" financial products, like the "liar loan" and exploding adjustable-rate mortgage, have wreaked havoc on our economy.

At the cost of a king's ransom from the U.S. treasury, we saved Wall Street innovators from the housing bubble they created, while thousands of homeowners and workers across the U.S. have been left to suffer through the "Great Recession." In the Philadelphia area, home prices have fallen by nearly 9 percent since 2007, and, as of December, there were well over 250,000 unemployed workers in the region.

It's no mystery how we got here: Big banks made billions from the sale of defective financial products that ultimately undermined our economy.

So what are we going to do about it? The Senate is debating legislation to create an independent Consumer Financial Protection Agency to monitor the safety of financial products.

Wall Street, pockets bulging from huge government bailouts it secured by holding the economy hostage a little over a year ago, is now spending millions to lobby against this protection. They want to limit the proposed agency's authority and undermine its independence by burying it in the very agencies that looked the other way as pin-striped predatory lenders pumped up the housing bubble.

Our recent experience with Toyota, as well as periodic problems with the safety of food and pharmaceuticals, illustrates that even under the watchful eye of a consumer protection agency, companies succumb to the temptation to cut corners, undermining our safety. But the fact remains - whether it's cars, food or pharmaceuticals - the presence of a cop on the beat has made us all safer than we'd otherwise be.

And now we've learned the hard way that the same principles of consumer protection that we rely on when driving our families, feeding our kids or taking our medications should also apply to the mortgages, car loans and other financial services sold in our neighborhoods.

THE HOUSE of Representatives has already approved legislation to create a consumer watchdog for financial products and rein in an out-of-control and unsafe system.

The question: Will the Senate side with consumers and vote to create an independent Consumer Financial Protection Agency with authority over the wide range of consumer financial service products?

Maybe they need a reminder from those who put them in office that this is the type of job we elected them to get done.

Mark Price is a labor economist at the Keystone Research Center in Harrisburg. For more information, see www.keystoneresearch.org.