The house just passed HR 4173 today that would "tighten federal regulations on financial institutions."
That seems to be the trend these days. "Tightening" and "regulating" is what our government is doing best lately (tightening and regulating everything in the country except our government, that is).
But that's not the embarrassingly predictable part of the bill. No, the bonus to all of us taxpayers is that it will also create--yep, another federal agency. Whatever else the bill provides for (mostly undoing Congress' previously ill-advised Home Valuation Code of Conduct passed this spring), it's providing us with another federal agency to pay for. The federal government, it seems, is the only sector of our economy that's actually growing.
The final shocking twist to this story is the bill's sponsor. Envelope, please..."Oh my God, it's Barney Frank."
Ol' Barn, you'll recall, was the guy back in 2003 who brushed off the administration's concerns about the fiscal viability of Fannie Mae and Freddie Mac by saying from his big chair on the House Financial Services Committee, "These two entities [Fannie & Freddie] are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."
Apparently impervious to irony, Rep. Frank is calling for yet another federal agency in this bill.
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OK, so you've identified two of the Big Problems: government overreach and political hypocrisy.
But then there's this other little culprit in the mix: unbridled corporate greed, as evidenced by unscrupulous lending practices, impenetrable investment vehicles, insufficient capital reserves, obscene compensation practices and hyper-aggressive lobbying tactics that preserve and uphold each of the foregoing. Whatcha gonna do about those? Only those same overreaching governments have the authority to rein in a group of actors who obviously can't be trusted with the keys to the store.
So while we can't expect regulation to be intelligent, measured or remotely effective in the long run, if it at least slows the pace of our eventual collapse, I say Godspeed.
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