Worse Than Nothing

Hurrah! The Obama brand of financial regulations have just been signed into law yesterday and don't we all feel better? Do these new rules and the growing bureaucracy that will need to be created and put into place to enforce them address the bad loans which virtually all defaulted issued to those who were not credit-worthy which banks were forced to make by the Federal government and pressure groups like Jesse Jackson's Rainbow Push Coalition and ACORN after frivolous claims of racism by way of redlining which set off the economic collapse in the first place? No, the regulations do not mention them at all. Does the new financial regime regulate the bloated government-sponsored enterprises Fannie Mae or Freddie Mac (or even loans to our military veterans which like the rest of the economy are increasingly falling into default)? Once again, no, not in the least, the government backed liabilities have in fact only increased with a complete takeover by the Federal government of student loans. What the regulations just signed do address, they get wrong. In an attempt to gain more government oversight of the risky derivatives markets, the new rules will restrict farmers and airlines from hedging and locking in fuel and other needed commodities at lower costs by securing contracts that lock in savings which have just been regulated out in an attempt to throttle hedge fund risks on Wall Street. Then, the new scheme will inhibit community banks, the smaller banks that dot the nation and have always had a local focus and boosted local businesses, from making loans while leaving the largest banks virtually unhindered in still taking the risks that got them into trouble in the first place, but with one proviso, the President can now more or less arbitrarily decide that a financial institution that has been deemed too big to fail is in trouble and take it over. With the new regulatory scheme, the Obama care regime, and the car company takeovers, the Obama administration now has effective control over seventy percent of the US economy. Like so much else Team Obama is doing, what masquerades as help, only does damage. Knowing this, that Obama has got your back (and your wallet), don't you feel much better.