Damian Paletta (WSJ) has a summary of the conference committee’s final agreement on the new financial regulations.
There is nothing all that surprising here: expansion of regulation (with a few politically expedient exemptions and some revenue sweeteners).
Rep. Jeb Hensarling (R., Texas) is quoted in the above story as saying: “My guess is there are three unintended consequences on every page of this bill.” My guess is that the good congressman is understating things. But even if he isn’t, at almost 2,000 pages—pages that, if experience proves true, have never been read—that is a lot of unintended consequences.
Let us recall that in May 2009, Congress passed legislation to create a Financial Crisis Inquiry Commission “to examine the causes, domestic and global, of the current financial and economic crisis in the United States.” The commission was given broad investigative powers and is still holding hearings (indeed, it is scheduled to hold hearings next week on the role of derivatives in the financial crisis, where it will question witnesses from American International Group, Inc., Goldman Sachs Group, Inc., the U.S. Commodity Futures Trading Commission, the Office of Thrift Supervision, and the New York State Insurance Department).
Congress directed the commission to submit its report and specific findings on December 15, 2010. Presumably, this report could prove useful in making sense of the financial crisis and designing a new regulatory architecture. That is, it could prove useful if one believed that Congress and the administration were intent on good policy rather than good politics. But as is so often the case, politically established timetables trump careful deliberation.
Senator Dodd is quoted in the above story as saying: “This is about as important as it gets, because it deals with every single aspect of our lives.” Indeed, one measure of its importance is that Congress decided to act before it had allowed the experts it appointed to do the heavy intellectual work to complete their mission.