Financial Regulation Bill

Hello everyone,

I just want to preface this (my first post on an actual issue) by saying, I've posted a poll on my homepage. It will run until election day this year (November 2nd). I want you guys to tell me what you think of the current President, by grading him on a scale of A-F.

As most of us who follow American politics know by now, the financial regulation bill has passed through both chambers of Congress and has been signed into law by the President.

Many have been touting the accomplishments of this bill, raving about the success that is to come with the passage of this hitorical legislation. However, what does this bill really accomplish? Does it really address the source of the financial meltdown of 2008? Of course it doesn't. What it DOES do, however, is give the Federal Government the power to pick and choose winners and losers. Here's how:

First, the bill regulates certain sectors of the economy. When one sector begins to falter (as is always the case with regulation), this bill will give the Federal Government the power to bail out whichever companies it deems too big to fail. The scariest part of it all though, is that there is no concrete measure as to what is too big to fail. For example, if company A employs 5500 people and generates $1.5 million per year, and company B employs 4000 people and generates $750,000 per year, there is nothing to ensure that company A receives the bailout funds (although the merits of bailouts in the first place is also debatable). Now, it is not certain that the President or administration WILL be corrupt with bailout funds; but it nonetheless LEAVES ROOM for them to do so. And I wouldn't be so quick to jump on the administration's bandwagon when it comes to trusting them with bailout funds. These are the same people (Rahm Emanuel, Lawrence Summers, Barack Obama, etc.) that helped Goldman Sachs through the tough economic times of 2008, while letting Lehman Brothers and Bear Stearns collapse. Seems fishy to me, and now they only have more power.

Anywho, let us return to the point about whether or not it addresses the real source of the 2008 collapse. Many people will be reading this saying, "Oh well sure, it regualtes the banks and derivative markets, those are what really helped the economy plunge". Well, not quite. Dig deeper folks. You'll find that the real source of the disaster was the collapse of the housing market, caused primarily by....FANNIE MAE and FREDDIE MAC. Yes, that's right, the GOVERNMENT! How so you may be asking? Well, the government used those two firms to provide lower income families with affordable mortgages. This forced the private sector to also lower their rates. So, they did...on the surface. At those rates, however, they could not make money handing out those mortgages, so they gave low rates at first and would jack the rates higher later on. This led to the subprime crisis. Do you think the government will admit to that? Gosh no.

So when it comes to the regulation bill, don't you think that the source of the biggest mortgage crisis in American history should be regulated? Of course not. I don't either, because it's the REGULATION that caused the mess in the first place. There we have it, government has shown us first hand why we shouldn't overzealously regulate the economy, right before signing regulation into law. This is just one example of why Americans NEED to shift control of Congress 92 days from now.

Cheers,
RightForever