The new financial regulatory bill

Once again, we see the Democrats decide that the way to a better world is for more government intervention in the economy. this time it is the banking and finance sector that gets the intrusion. Sadly, it seems that no one got the actual message of the last melt down. The problems that led to the recession were not so much a lack of regulation as a lack of enforcement of those regulations. There was not too little intrusion by government in the key areas; rather, there was too much. Let's start with the amount of intrusion. Beginning in the 1990's there was a push by the federal government to increase home ownership levels in the USA. This was a good idea that went bad. The government pushed banks to make more and more loans to those whose credit was worse and worse. The servants of the federal government at Fannie Mae and Freddie Mac bought up riskier and riskier mortgages with the result that banks who made risky loans were taken off the hook for the risk. This led to enormous numbers of new buyers with shaky credit getting into the housing market and prices rising in a bubble like atmosphere. Indeed, we have the nonsense of some lefties blaming "predatory" lending for the eventual collapse. Imagine the evil bankers forcing money on those who could not likely repay the loans. Those evil bankers set themselves up for massive losses. How clearly predatory. It is as if Bill Gates gave away half his fortune and then got called predatory for not giving away the rest.

As the quality of mortgages declined, no one in the federal bureaucracy halted the idiocy at Fanny and Freddie that could have stopped the bubble and led to a much smaller correction. When President Bush tried to get the oversight agency to intervene, he was voted down by Congress with Barney Frank in the lead. that, of course, is the same Barney Frank who has been so instrumental in this latest bill. He was totally wrong before, so how does it make sense to let him lead on the new bill?

Once again, we get another 2000 page bill that essentially no one has read. I have not even been able to get the text of the final bill yet on line. Obviously, the congressmen and Senators have not read it. Who knows what evil this will do? We will only know after the bill gets passed and we all have to face the consequences.

Let me put it another way. There is strong agreement that something needs to be done to prevent another financial melt down. I agree. The problem, however, is not the need for action; it is the definition of what that action should be. Congress should not be gambling on the hope that the methods which have never worked will suddenly start working.