I just arrived at my hotel in Pennsylvania after perhaps the worst driving day on my trip — more on that anon — to learn that the Senate had passed a banking bill, allegedly to curb Wall Street abuses. I fear from what I have read of earlier drafts of the legislation that it will place a greater burden on smaller banks, particularly those that did not contribute to the financial meltdown, enterprises which weathered the storm quite well because they did not make risky loans.
There was one paragraph in the article on the bill’s passage that caught my eye and showed that the Democrats pushing the legislation and the four Republicans who unwisely voted for it are just not serious about getting at the real cause of the meltdown:
For all its breadth, the bill stopped short of taking on the nation’s giant mortgage companies, the government-affiliated Fannie Mae and Freddie Mac. Democrats feared that incorporating massive housing policy into the bill would have sunk it.
It would have sunk the bill if Democrats addressed the root cause of our late problems! Now, Congress has empowered the government ever more, creating additional layers of bureaucracy while ignoring the entities at the crux of the late crisis.
FROM THE COMMENTS: Begging to differ with this post based on its original title, V the K says the bill is “worse than grandstanding”:
1. It prohibits or severely restricts banks from engaging in profitable activities.
2. It gives the Government the power to take over banks when they become unprofitable.
This bill is worse than grandstanding. It’s bad policy grown out of grandstanding. So, I changed the title to reflect that.