The Dodd-Frank Bill, which supposedly will bring significant financial reform to banks and Wall Street, has passed Congress and is on its way to the White House for Obama’s signature. Wait a minute, what was the name of that bill again? Dodd? Frank? Sound familiar?
Sen. Chris Dodd and Congressman Barney Frank were the architects of the government mismanagement of the economy that led to the current recession. They were the ones who opened the floodgates for Fannie and Freddie to make all those bad loans. Interestingly, neither Fannie nor Freddie are mentioned in this massive bill [similar in size to the healthcare bill]. None of the new regulations apply to them. The bill also encourages loans to minorities and the poor. This is change we can believe in?
What does the bill accomplish?
Republicans believe it will lead to a massive emigration of financial-sector jobs overseas, which will only worsen the economy. In that sense, and in its avoidance of dealing with Fannie and Freddie, it does simply reinforce the status quo.
Yet it has activist features. One senator calls it a “legislative monster.” It creates a Consumer Financial Protection Bureau, which sounds good, but is just another huge bureaucracy destined to micromanage the financial industry. The president of the American Bankers’ Association analyzed it in this way:
The result will be over 5,000 pages of new regulations on traditional banks and years of uncertainty as to what the massive new rules will mean.
Yeh, that sounds like reform alright.
Democrats know they face a tidal wave of potentially lethal proportions in the November elections. Speaking of “massive,” it’s possible that a massive number of Democrats in the Congress will be going home for good. Already, Nancy Pelosi and Harry Reid are planning to push through other sweeping measures right after the election while they still have their majorities. In other words, they are going to use the lame-duck status of this Congress, before the newly elected representatives take their seats, to blitz through other controversial legislation while they can. They will have nothing to lose politically, in their calculation.
One of their prime targets is the Bush tax cuts, which will expire at the end of the year. They plan to let them expire, thus raising tax rates on every income bracket, along with estate taxes and other economy-killing measures.
This year can’t end soon enough.