Financial Bill Will Destroy Small Business / Increase Unemployment

I find it almost incomprehensible given how Barney Frank and Chris Dodd caused the housing disaster almost single handily all through the 90's and up to the present, that they continue to have the power to continue to cause more chaos in the financial markets.

With America on the ropes, heading toward collapse, congress and the president push forward an agenda that seems intended to make our bad situation worse.

This article, from the WSJ, points some interesting and troubling aspects of the new financial bill now working it's way through congress. And what is worse, Scott Brown is turning out to be more Democrat than Republican. He ran and won on the principles of small government but now that he is in power he has decided that it is best to just 'go along'. He can not be counted on to vote common sense. He is compromised.


THE UNCERTAINTY PRINCIPLE -- II
Source: Editorial, "The Uncertainty Principle - II," Wall Street Journal, July 16, 2010.

The Dodd-Frank financial reform bill passed by the Senate yesterday promises to generate historic levels of red tape. But apparently the 2,300 pages are so complicated that a debate has broken out over precisely how many new regulatory rule-makings it will require, says the Wall Street Journal.

According to an analysis by the Davis Polk & Wardwell law firm:

At least 243 new federal rule-makings are on the way, not to mention 67 one-time studies and another 22 new periodic reports. The attorneys were careful to note that this was a low-ball estimate, counting only new regulations mandated by the bill.

Now comes Tom Quaadman of the U.S. Chamber of Commerce, who doesn't quarrel with the Davis Polk estimate but has added rule-makings authorized by this legislation to those that are mandated:

He says American businesses should expect a whopping 533 new sets of rules.

To put this number in perspective, Sarbanes-Oxley, Washington's last exercise in financial regulatory overreach, demanded only 16 new regulations. Thus he reasons that Dodd-Frank "is over 30 times the size of SOX."

Quaadman may be selling Dodd-Frank short, says the Journal. Neither his analysis nor the one from Davis Polk counts duplicative rule-makings, when various agencies create different rules governing the same activity, as they are empowered to do in various Dodd-Frank provisions.
While it might seem that the regulatory uncertainty created by the bill won't last much longer than a decade as new rules are implemented, that also could be optimistic.

When regulators are granted new authorities without expiration dates on their powers, the rule-making possibilities are infinite, says the Journal.

The most likely result of Dodd-Frank in the near term is a generally higher cost of credit, and a bigger market share for the largest banks that can more easily absorb the new regulatory costs. In the longer term, do not expect it to prevent the next financial mania and panic, says the Journal.