The Senate passes the 2,300 page financial reform bill -- Restoring American Financial Stability Act of 2010 (H.R. 4173) by a 60 to 39 vote. If it were not for three New England Republicans (Snowe, Collins and Brown), it would have failed.
The superficial goal is worthy: to address problems that caused the current recession and taxpayers $145 billion. The resulting legislation monstrosity will not even come close to addressing this goal.
It is reminiscent of recent legislation that attempted to address the then-current financial issues of the day:
-- Gramm-Leach-Bliley Act (GLBA) -- Financial Services Modernization Act of 1999
-- Sarbanes–Oxley Act (2002) -- Public Company Accounting Reform and Investor Protection Act (Senate) and Corporate and Auditing Accountability and Responsibility Act (House)
The legislature feels compelled to act after major events. They must be able to tell their constituencies that that did 'x' or 'y'. It does not matter if it actually addresses the problems. It does not matter if it includes billions in unrelated pork. It does not matter what it will cost long term or the logistics of its administration. Some of the highlights are:
-- Gives the government authority for setting aggregate speculative position limits (agriculture) for market participants across various exchanges to better regulate market manipulation.
-- Requires derivatives to be traded in clearinghouses (exemptions for legitimate end-users of commodities and large financial speculators).
-- Strengthened authority for the CFTC and the SEC to determine if certain market actions are disruptive or manipulative, as well as improved authorities to take enforcement actions when deemed necessary.
-- Gives the Fed the authority to step in if it determines actions by large financial entities are acting in a disruptive or manipulative manner.
Not a word about Fannie Mae or Freddie Mac, two massive money pit pariahs that continue to drain the coffers.
Burdensome legislation like this creates an unfriendly business environment (like GLBA and SOX). It will drive business and jobs overseas. It hurts small businesses because it adds higher business costs.
This is nothing more than a Democrat means to expand government control over the economy and move the U.S. closer to the European system. This is not the change that does America any good.