Thoughts on a Saturday

Does anyone remember when Nanci Pelosi said, “But we have to pass the bill so that you can find out what is in it, away from the fog of the controversy." She was referring to the health care reform legislation. The problem is that the majority of people who voted for the health care reform takeover legislation didn't know what was in it. The #2 person in the senate didn't even know what was in the latests financial reform bill!

Senate Majority Whip Richard Durbin admitted Friday that he is "in the dark" about the national health care bill currently under construction by Senate Majority Leader Harry Reid. In an exchange on the Senate floor, Republican Sen. John McCain asked Durbin, "Should we not at least be informed as to what the proposal is that the Senate Majority Leader is going to propose to the entire Senate?" Durbin's answer: "I would say to the senator from Arizona that I am in the dark almost as much as he is, and I am in the leadership." Durbin explained that during a Democratic caucus, Reid and the small group of senators involved in crafting the bill turned to their fellow Democrats and "basically stood and said, 'We are sorry, we can't tell you in detail what was involved.'"

"Isn't that a very unusual process?" asked McCain, noting that "we are discussing one-sixth of the gross national product; the bill before us has been a product of almost a year of sausage-making. Yet here we are at a position on December 12, with a proposal that none of us, except, I understand, one person, the Majority Leader, knows what the final parameters are, much less informing the American people. I don't get it."

"I think the senator is correct," Durbin answered, "saying most of us know the fundamentals, but we do not know the important details behind this." Durbin went on to claim that Reid is not to blame for the situation; rather, the blame lies with the Congressional Budget Office, which Reid has asked to do a cost estimate on the bill. "We may find that something that was sent over there doesn't work at all, doesn't fly," Durbin said. "They may say this is not going to work, start over." Therefore, Durbin said, Democrats are keeping it all a secret. "It is frustrating on your side," Durbin told McCain. "It is frustrating here." But, Durbin added, he hoped to have the Congressional Budget Office report soon.

This proves a few things. Most important is the fact that this bill was drafted in secret. Why would a bill of this importance need to be done in secret if there is nothing dubious in it?

The above conversation, between Durbin and McCain, took place on December 12, 2009. The bill was passed in the senate on December 24, 2009. The bill was not finalized by December the 12th. This means that the senate had less than 12 days to go through a bill, more than 2,000 pages long, before voting on it! Can anyone be expected to believe that those who voted on the legislation actually understood it?

Obama just signed the financial reform legislation, making it law on the 21st of this month. Another bill more than 2,000 pages long. The president gave a speech after signing the bill.

The president sought to reassure Wall Street and financial institutions in his remarks, insisting that the reform will "foster innovation, not hamper it."

The president did acknowledge that much of the impact of the bill will ultimately be left to regulators and that companies will still have leeway to act irresponsibly. Many provisions in the legislation won't take effect for a year or more as regulators set out the new rules.

The president concluded his remarks by stating that there is "no dividing line between Main Street and Wall Street."

"In the end, our financial system only works - our market is only free - when there are clear rules and basic safeguards that prevent abuse, that check excess, that ensure that it is more profitable to play by the rules than to game the system," he said. "And that's what these reforms are designed to achieve: no more, no less. Because that is how we will ensure that our economy works for consumers, that it works for investors, that it works for financial institutions - that it works for all of us."

Huh? I thought that the division between Main Street and Wall Street was the entire selling point for financial reform? Wall Street is just a bunch of "fat cats" right? We don't want to have to bail out big business anymore right? What in the world is he talking about? You can't have it both ways...

The scary part is this, "The president did acknowledge that much of the impact of the bill will ultimately be left to regulators..." Hmm. I mentioned this about he health care bill last year. All of the recent legislation is intentionally ambiguous.

Regulators will determine what the new financial rules are going to be. Regulators that are yet to be appointed. This, of course, makes it impossible for businesses to determine what direction to go in. Businesses need stability in the market, NOT the government! Every time the government interferes with the market it injects instability. When the government announces regulations and doesn't define them it insures instability.

Just look at what Chris Dodd (one of the bill's authors) had to say.

“We can’t legislate wisdom or passion. We can’t legislate competency. All we can do is create the structures and hope that good people will be appointed who will attract other good people,” Mr. Dodd said.

Basically Chris Dodd and Barney Frank have authored a bill that outlines a structure which, if in the wrong hands, can severely hurt the economy. Brilliant!

That ought to foster trust in the system.

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