As the article confesses we really don't know what it does yet=
. =A0It empowers a lot of new bureaucrats to micromanage private companies =
who fail to contribute enough to their party's campaign fund.
"The idea is to prevent panic from spreading. The Treasury would =
pay the bank's obligations. Treasury would be repaid with industry fee&=
quot; =A0In other words, we tax the prudent and successful to subsidize the=
foolish. =A0This is exactly the wrong thing to do. =A0It's bad enough =
with individuals, where we modulate it somewhat by human sympathy for anoth=
er person. =A0But to do it for companies is insane. =A0The Democrats are so=
cialists who do not understand why competition and markets work. =A0This bi=
ll moves D.C. closer to running companies politically instead of based on p=
roduct desirability.
Other parts force banks to be less profitable by limiti=
ng their ability to insure themselves through options, which will only caus=
e capital to flee relatively safe banks (FDIC for the little guy) for less =
safe investment firms, leaving us less safe, rather than more.
"Clearinghouses will require derivatives sellers t=
o set aside money for each contract in case their bets go bad." =A0Thi=
s is already the case. =A0No law was needed. =A0It just makes sense that if=
you are the clearing house or the broker, you want your clients to have ma=
rgin to cover their risk. =A0The problem is that it is very difficult to de=
cide what your risk exposure really is. =A0What if you spread gold long cal=
ls over silver short calls for instance?
"Bureau of Consumer Financial Protection that is being =
created." =A0Another regulatory agency whose job will be to suck down =
tax dollars in the interest of forbidding your from accepting the loan you =
want.
Some of the damage:
-favors-interests-of-unions-activists/" target "_blank" style "color: r=
gb(42, 93, 176); ">http://www.washingtontimes.com/news/2010/jul/14/finance-=
bill-favors-interests-of-unions-activists/=A0- it's being used as a=
n excuse to regulate companies and force them to endure hostile interests, =
completely outside of any relevance to the crisis.
6" target "_blank" style "color: rgb(42, 93, 176); ">http://www.cato.or=
g/pub_display.php?pub_id 11916=A0- it doesn't address the actual =
cause of the crisis at all: the federal government encouraging over leverag=
ed risk taking by 1) forcing loans to unqualified persons in the interest o=
f combating racism, 2) subsidizing down payments thus inducing low income i=
ndividuals into over leveraged =A0loans, 3) Insuring AIG, Freddie, and Fann=
ie thus inducing mortgage companies to accept higher risk because they coul=
d transfer the risk premium to the government (and this indeed is exactly w=
hat happened), 4) Subsidizing home interest with the tax code inducing peop=
le to borrow more than they should (not to mention taxing the poor to help =
the middle class). =A0Frank and Dodd are flat earth socialists for denying =
that their support for these programs caused the problem.=A0