With regard to the finance reform bill, I found a few comments in Friday’s (July 16) Wall Street Journal to be notable.
First, this quote from a story titled “Impact to Reach Beyond Wall Street”:
“”The bill does not respond at all to the causes of the financial crisis,” said Peter Wallison, a former Reagan administration official and co-director of American Enterprise Institute’s financial policy studies program. “Instead, it weakens the U.S. economy and reduces economic growth.”
Second, a couple of quotes from another July 16 story titled “Law Remakes U.S. Financial Landscape”:
“The bill “is a 2,300-page legislative monster…that expands the scope and the powers of ineffective bureaucracies,” said Sen. Richard Shelby (R., Ala.).”
“”We failed completely to understand the complexity of what the impact of the national decline in housing prices would be in the financial system,” said Ms. Yellen, currently president of the Federal Reserve Bank of San Francisco. “We saw a number of different things, and we failed to connect the dots.”
I am in general agreement with the quotes from Peter Wallison and Richard Shelby.
I included the quote from Janet Yellen as I believe it is notable, and frankly, I was surprised to see it.
From an “all things considered” standpoint, I don’t believe this bill provides any aggregate value. It won’t prevent any future financial crisis. I think it is notable that there is so much negative commentary about this bill from the financial and economic community; some of this commentary is appended to the second story mentioned above.
Furthermore, not only does this bill not provide aggregate value, but it also has the potential to be quite pernicious on numerous fronts. At this point, it is impossible to predict how this bill will be enacted; however, it is clear that there is outsized potential for many unintended harmful consequences.
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