John Taylor
07-15-2010, 09:54 AM
http://www.thedailybeast.com/blogs-and-stories/2010-07-14/a-failed-financial-bill/?cid=hp:exc
Later this week, the president will sign the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the entire country will witness a “Thalidomide” moment—that special time immediately following a terrible crisis when our elected political leaders, summoning all the self-laudatory instincts they possess, pronounce the latest “crisis” solved by dint of legislative fiat. Dodd-Frank will be our second such financial crisis/Thalidomide event since the new millennium, having been preceded by Sarbanes-Oxley just eight years ago.
As it was with Sarbanes-Oxley, we’ll be told that our last economic crisis was someone else’s fault (but never Congress’) and all we really need is a hefty dose of legislative medicine. And “hefty” doesn’t even begin to describe this dose of legislation. In 2,500 pages of dense prose, we’re about to receive legislation that could better be entitled “The Lawyers’ and Lobbyists’ Full Employment Act.” Which begs the question, what’s the likely impact of Dodd-Frank?
Here’s a scorecard for your consideration:
• Dodd-Frank is a ponderous beast. If Congress were paid by the word or the page, this verbiage might be understandable. But neither of those conditions exists, meaning all we can be certain of is that no one in Congress or the administration has actually read the entire bill.
• Who actually knows what’s in the bill? Passing legislation without understanding its contents is akin to allowing inmates to run the asylum. Only congressional staffers and paid lobbyists know what’s in the bill, and perhaps only specific provisions. In a bill this large, dealing with subjects this complex, all the rest of us know are the sound bites prepared by the shepherding committees.
• The legislation teems with unintended consequences. A case in point is the provision requiring the SEC to establish an investor advocate. Putting to one side the fact that this is the SEC’s mandate, this provision unleashes an SEC adversary—someone who must express unfiltered judgments on the job performance of everyone else at the agency, including the five commissioners, giving this person an unlimited budget and allowing this person to hire outside counsel to sue the SEC or FINRA, if he or she disagrees with their actions!
http://www.thedailybeast.com/blogs-and-stories/2010-07-14/a-failed-financial-bill/?cid=hp:exc
Later this week, the president will sign the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the entire country will witness a “Thalidomide” moment—that special time immediately following a terrible crisis when our elected political leaders, summoning all the self-laudatory instincts they possess, pronounce the latest “crisis” solved by dint of legislative fiat. Dodd-Frank will be our second such financial crisis/Thalidomide event since the new millennium, having been preceded by Sarbanes-Oxley just eight years ago.
As it was with Sarbanes-Oxley, we’ll be told that our last economic crisis was someone else’s fault (but never Congress’) and all we really need is a hefty dose of legislative medicine. And “hefty” doesn’t even begin to describe this dose of legislation. In 2,500 pages of dense prose, we’re about to receive legislation that could better be entitled “The Lawyers’ and Lobbyists’ Full Employment Act.” Which begs the question, what’s the likely impact of Dodd-Frank?
Here’s a scorecard for your consideration:
• Dodd-Frank is a ponderous beast. If Congress were paid by the word or the page, this verbiage might be understandable. But neither of those conditions exists, meaning all we can be certain of is that no one in Congress or the administration has actually read the entire bill.
• Who actually knows what’s in the bill? Passing legislation without understanding its contents is akin to allowing inmates to run the asylum. Only congressional staffers and paid lobbyists know what’s in the bill, and perhaps only specific provisions. In a bill this large, dealing with subjects this complex, all the rest of us know are the sound bites prepared by the shepherding committees.
• The legislation teems with unintended consequences. A case in point is the provision requiring the SEC to establish an investor advocate. Putting to one side the fact that this is the SEC’s mandate, this provision unleashes an SEC adversary—someone who must express unfiltered judgments on the job performance of everyone else at the agency, including the five commissioners, giving this person an unlimited budget and allowing this person to hire outside counsel to sue the SEC or FINRA, if he or she disagrees with their actions!
http://www.thedailybeast.com/blogs-and-stories/2010-07-14/a-failed-financial-bill/?cid=hp:exc