Hat Tip to Michelle Malkin.
Barney Frank and Chris Dodd team up for another clusterfuck disguised as “reform”.
Early on Friday morning, a House-Senate conference committee finished work on a consensus version of HR 4173, the Dodd-Frank financial overhaul bill. The conference committee worked for 20 hours to draft this new bill, and completed the work shortly after 5:00AM.
When Congress meets in the dead of night to decide critical issues, it prompts serious questions about the quality of their work. Were important issues debated thoroughly? Were all Representatives and Senators part of the debate? Did all of them consider their votes carefully?
Not surprisingly, the answer is ‘no.’ On Thursday night, the conference committee debated the ‘Volcker Rule,’ restricting the power of banks to engage in trading. Some feel the rule is necessary, others feel it will kill jobs, and give foreign financial institutions an advantage over American banks. Not only was the debate on the Volcker Rule limited, but an amendment dealing with it was defeated on a vote of 6-10 – with Chairman Barney Frank casting 6 of the ‘no’ votes himself.
So, one congressman had the authority to cast 6 votes by himself? WTF???
And like other Dem “reforms”, it will be costly.
The Congressional Budget Office estimated the cost of the legislation at nearly $20 billion over the next decade.
The Heritage Foundation discusses some of the flaws:
……this law is going to be continually rewritten by federal bureaucrats for years to come. And the continued uncertainty it will create is just the beginning of its faults:
Permanent Bailout Authority: The Dodd-Frank bill creates an “orderly liquidation” process by which regulators are empowered to seize financial institutions that they believe are in danger of failing and liquidate them. While the lack of a broadly accepted process for closing down large financial institutions helped lead to the massive bailouts of 2008 and 2009, this liquidation process is problematic. Federal regulators are granted broad powers to seize private firms they feel are in danger of default, and these powers are subject to insufficient judicial review. Such governmental discretion to seize private property is constitutionally troubling.
Trusting the Same Regulators that Failed Last Time: The legislation establishes a new 10-member Financial Stability Oversight Council composed of regulators that would be responsible for monitoring and addressing system-wide risks to the financial system. This council would also have nearly unlimited powers to draft financial firms into the regulatory system and even force them to sell off or close pieces of themselves. Unfortunately, it is extremely difficult to detect systemic risk before a crisis has occurred, and the council would serve mainly as a group to blame for failing at an almost impossible task. On the other hand, its huge powers are much more likely to destabilize the financial system by stifling innovative products while failing to detect dangers posed by existing ones.
Brand New Innovation Killing Regulators: The bill also creates a new Bureau of Consumer Financial Protection with broad powers to regulate the financial products and services that can be offered to consumers. The new agency would nominally be part of the Federal Reserve System, but it would have extraordinary autonomy. This autonomy would impede the efforts of existing regulators to ensure the safety and soundness of financial firms, as rules imposed by the new agency would conflict with that goal. For many consumers, this would make credit more expensive and harder to get.
Micromanaging the Market: The conference committee also added a form of the “Volcker rule” which would largely prohibit any bank or other institution with FDIC-insured deposits from undertaking proprietary trading or from owning or sponsoring hedge funds or private equity funds. While the legislation does reject the near-total ban on such investments, the difference between legitimate and traditional activities and those the Volcker rule seeks to ban would be difficult, if not impossible, to determine. Attempting to do so would require an intrusive, expensive regulatory compliance system that by its nature would micromanage day-to-day activities.
Fannie and Freddie Forever: Despite much rhetoric about ending bailouts, the bill does nothing to address Fannie Mae and Freddie Mac, two of the largest recipients of federal bailout money. These two government-sponsored enterprises, now in federal receivership, helped fuel the housing bubble. When it popped, taxpayers found themselves on the hook for some $150 billion in bailout money. The failure to address their future is a serious error and shows just how hollow are claims that this agreement will prevent future crises.
These are just some of the major flaws in a bill that is just one House and Senate vote away from President Barack Obama’s desk (a fuller list can be found here). But final passage is not as sure today as it looked Friday. The passing of Sen. Robert Byrd (D-WV) leaves the majority one vote short of the 60 needed to move for a final vote. In addition, the insertion of an estimated $20 billion in new taxes has Sen. Scott Brown (R-MA) reconsidering his original vote in favor of the measure. Scott released a statement explaining: “My fear is that these costs would be passed onto consumers in the form of higher bank, ATM and credit card fees and put a strain on lending at the worst possible time for our economy. I’ve said repeatedly that I cannot support any bill that raises taxes.”
Explaining that the Dodd-Frank bill would force banks to either take on more risk to recoup earnings diminished by reform or behave too conservatively in order to avoid losses, financial analyst Chris Mutascio summarized the ultimate effect of the legislation: “Pick your poison—neither tastes good to us and we believe neither is particularly good for the economy and job growth.”
This atrocity expands government power and discretion to seize failing financial firms.
I wrote about this on a previous post:
That kind of “seizing financial firms” is what got us into this economic clusterfuck. The bailout/takeover of Fannie Mae and Freddie Mac, and a portion of the banking industry, are all part of Obama’s ‘financial landscape’.
The Dems caused this banking crisis and they’re punishing Wall Street and the taxpayers for it.
Two of the idiots who had a major role in the financial meltdown—Barney Frank and Christopher Dodd— helped concoct this disastrous banking law. None of the Democrats in the Obama regime have any business being allowed to oversee this country’s financial system.
This is a heinous assault on our free market economic system. The Dems have endowed themselves—through more abuse of their office—with unlimited power over American business. The federal government will have total authority over investment firms and banks; to compel them to trade, sell, and buy as the government sees fit. We are in the final stages of Obama’s Marxist “fundamental transformation” of America; where the government controls the means of production and distribution.
The Dems are completely destroying the freedoms this country was founded upon.
To the assholes who keep voting douchenozzles like Barney Frank back into office: When the socialist transformation is complete, you proletarians will finally find out how harsh the government can be. Everyone will be subjected to rationed healthcare, and the average worker will become a serf toiling for the Kleptocracy and the welfare class.
Everyone that is except Der Kommisars, who really couldn’t care less about you.