I have long held the position that incentives matter. Further, I hold that government cannot completely control all reactions to incentives. That is, when a government body imposes regulations upon a population with the desire to guide correct action, the government body cannot anticipate all reasonable reactions.
And so, in an effort to regulate mortgage originators, the government is forcing corporations to leave that segment of the business:
MetLife, the nation’s largest life insurer, announced Tuesday that it would close its home mortgage-origination operation, costing the company at least $90 million. Most of the 4,300 employees at the unit will lose their jobs.
“The majority will no longer have a position,” said John Calagna, a spokesman for MetLife. Most of the workers at the business are based in Irving, Tex., Mr. Calagna said.
MetLife said in October that it was seeking a buyer for its mortgage unit after announcing plans to sell deposit-gathering operations to reduce federal oversight. The company reached a deal last month to sell about $7.5 billion of its bank’s deposits to General Electric.
The Federal Reserve, which oversees MetLife because of its size and banking operations, rejected its plan last year to raise its dividend and resume share buybacks.
Because of the Federal Government and the regulations it imposes, MetLife will now shed 4,300 jobs.
To be clear: Government regulations cost the economy 4,300 jobs. No outsourcing. No downsizing. No automation. No nothing. Pure and simple regulation avoidance.
And for added enjoyment, the NYT article goes on to mention the dollar amount that this will cost MetLife:
MetLife will continue to service current home-loan clients and offer reverse mortgages, the company said. The wind-down may cost as much as $110 million, according to the statement.
In addition to shedding 4,300 jobs, MetLife is WILLINGLY taking an action that will cost it $110 million dollars. The cost of the regulation is AT LEAST $110 million! AT LEAST!
Is there any legitimate argument that can be made that this administration is building an environment conducive to business and the free market?