Government Toady Proposes Limits to Mortgage Broker Pay

I really find it offensive when rank opportunists call themselves capitalists as they feed from the government trough. It's even more offensive when they espouse disastrous ideas that haven't worked, wont work and can't work. The latest is from is from the Curious Capitalist quoting Louis Pizante, CEO of Mavent, who makes his money reviewing loans for regulatory compliance. In other words, his livelyhood depends on government intrusion

"What Pizante would like to see instead are government rules on how mortgage
brokers are paid. "To me it would seem that it would be much easier to regulate
broker compensation," he said. For example: "You’re not going to get a lump-sum
fee, you’re going to get a percentage of the cash flows from that
loan."
There's been an awful
lot of talk over the past year about changing compensation both on Wall
Street and in the mortgage business to better reflect the risks inherent in
transactions that deliver a big up-front payday. But the standard retort is that
any firm that tries to enforce such pay arrangements would quickly
lose its best producers to competitors. Which, in Pizante's view, is exactly
why government needs to step in."

Beyond the fact that the government has no constitutional or moral authority to dictate the compensation of anyone or the terms of a private, voluntary contract, Pizante reveals an astonishing ignorance of market economics and a bit of a fascistic streak. He tells us that regulation is needed because firms willlose employees to competitors if they try to compensate brokers the way he wants, which is an admission that his idea can't work when individuals are free to choose.

So what he's saying is that he wants to cut off all avenues of escape for those brokers who will undoubtedly find his scheme unacceptable. The talented and competent will flee to other industries where they are still free (for now) to negotiate the terms for their services, leaving behind the hacks that will further blur the lines between government and business. It is axiomatic that when you regulate the price of anything you will have less of it with lower quality.

Mr. Pizante and the dishonestly named "Curious Capitalist" don't understand that and it's frightening that either of these ignoramus' are in any position of influence. Perhaps we should regulate Mr. Pizante's compensation and that of his company, since the fees he makes ultimately come from the American consumer through government force.