To close out 2009, I decided to do something I bet no member of Congress has done — actually read from cover to cover one of the pieces of sweeping legislation bouncing around Capitol Hill.
Hunkering down by the fire, I snuggled up with H.R. 4173, the financial-reform legislation passed earlier this month by the House of Representatives. I quickly discovered why members of Congress rarely read legislation like this. At 1,279 pages, the “Wall Street Reform and Consumer Protection Act” is a real slog.
Here are some of the nuggets I gleaned from days spent reading Frank’s handiwork:
For all its heft, the bill doesn’t once mention the words “too-big-to-fail,” the main issue confronting the financial system.
Instead, it supports the biggest banks. It authorizes Federal Reserve banks to provide as much as $4 trillion in emergency funding the next time Wall Street crashes. So much for “no-more-bailouts” talk. That is more than twice what the Fed pumped into markets this time around. The size of the fund makes the bribes in the Senate’s health-care bill look minuscule.
Oh, hold on, the Federal Reserve and Treasury Secretary can’t authorize these funds unless “there is at least a 99 percent likelihood that all funds and interest will be paid back.” Too bad the same models used to foresee the housing meltdown probably will be used to predict this likelihood as well.
The bill also allows regulators to “prohibit any incentive-based payment arrangement.” In other words, banker bonuses are still in play.
The bill isn’t all bad, though. It creates a new Consumer Financial Protection Agency, the brainchild of Elizabeth
Congressional Legislation Introduced By Barney Frank Pre-Approves $4 Trillion For Next Crisis
by ilene - December 30th, 2009 9:55 pm
Congressional Legislation Introduced By Barney Frank Pre-Approves $4 Trillion For Next Crisis
Courtesy of Mish
Barney Frank introduced H. R. 4173 purportedly "To provide for financial regulatory reform, to protect consumers and investors, to enhance Federal understanding of insurance issues, to regulate the over-the-counter derivatives markets, and for other purposes."
The bill is 1,279 pages long. I did not read it in entirety but Bloomberg columnist David Reilly did. It is amazing the things Barney Frank buried in a bill that is supposed to protect consumers. The bill does nothing for consumers, but does allocate $4 trillion to fighting the next financial crisis.
Please consider Bankers Get $4 Trillion Gift From Barney Frank: David Reilly.
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.