Better in their words…

Nice example of the Executive Branch not doing their homework and blaming the Judicial for ‘not playing nice’.  Also nice example of how the Obama wing of the Democrat party like to operate. They want to write, interpret, enforce and adjudicate everything.
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WSJ 4/9/2016

Treasury Secretary Jack Lew and his media bodyguards are still pouting over his courtroom defeat in the MetLife case. They’re traumatized because a federal judge had the nerve to suggest that when financial regulators deem a company to be a “systemic risk,” the feds must present evidence and follow their own rules. Mr. Lew’s tantrum includes a rushed Friday notice of appeal filed in the D.C. Circuit Court of Appeals.

Judge Rosemary Collyer’s March 30 decision rescinding MetLife’s designation as a systemically important financial institution was unsealed Thursday, and it’s a bell-ringer. Her opinion recounts precisely how Mr. Lew’s Financial Stability Oversight Council changed without explanation its rules for evaluating companies like MetLife, then pretended it hadn’t changed anything, while stubbornly refusing to consider the costs of its regulation—or the impact it might have on MetLife’s financial stability.

Mr. Lew and the gang still claim the Dodd-Frank law that created his council does not require cost-benefit analysis. But the judge cited Michigan v. EPA and other precedents to show that even if a statute doesn’t explicitly demand such analysis, that doesn’t relieve federal regulators of the duty to consider relevant facts.

Judge Collyer also noticed that the risk council never explained in detail the alleged dangers at MetLife or the risks it could pose to the financial system. The council argued—bromide alert—that “contagion can result when relatively modest direct, individual losses cause financial institutions with widely dispersed exposures to actively manage their balance sheets in a way that destabilizes markets.”

But Judge Collyer found that the council “never projected what the losses would be, which financial institutions would have to actively manage their balance sheets, or how the market would destabilize as a result.” The judge added that she “cannot affirm a finding that MetLife’s distress would cause severe impairment” of the financial system when Mr. Lew’s council “refused to undertake that analysis itself.” Predictive judgment, she noted, “must be based on reasoned predictions; a summary of exposures and assets is not a prediction.”

Since this was the first time that the new stability council faced a court challenge, taxpayers might have hoped that the regulators would study and reflect on the opinion and then conduct a thorough review of how the council performs its risk analysis.

But Mr. Lew’s background is in politics, not finance. So he issued a long critical press release after the decision was unsealed—conduct unbecoming a cabinet officer responding to a federal court. Then on Friday came the notice of appeal, roughly a week after the decision was reached. Typically a decision like this one, especially in a complicated financial case, would receive careful legal consideration at multiple levels within the government before leaping to appeal. But there’s a news cycle to think about.

Mr. Lew is treating Judge Collyer’s reasoned analysis as a judicial micro-aggression, but he won’t necessarily find his safe space at the appellate level. It’s true that President Obama and Harry Reid packed the D.C. Circuit with liberals by blowing up the Senate’s filibuster rule. But the three judges randomly selected to hear the appeal won’t necessarily believe in unlimited discretion for Mr. Lew.

Appellate judges will have a tough time overturning Judge Collyer’s careful reading of the facts. For eight years, federal regulators have failed to define precisely the “systemic risks” they claim they can identify across the financial landscape. They were never forced to get specific prior to the passage of Dodd-Frank in 2010, nor during the voluminous rule-making that followed. So if federal appellate judges are looking for the factual case against MetLife to rebut Judge Collyer’s findings, they won’t find it in the Justice Department’s legal filings.

But what they may find is a reason to take the Collyer decision even further. Because the judge discovered how “fatally flawed” Mr. Lew’s process was on factual and administrative grounds, she never reached the question of whether any of this is constitutional.

On appeal, the court would be free to consider whether the Constitution’s separation of powers can possibly be compatible with this new council. The same people at the council write rules, interpret them, enforce them and adjudicate them. This makes Mr. Lew the Judge Dredd of the U.S. economy. He would be wise not to give federal courts too many opportunities to reconsider his sweeping authority.

He’s furious that a judge called out the many flaws in his analysis.

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