New Wall Street Regulations Will Hurt Economy
Written By: Sheldon Richman | Posted: Tuesday, August 3rd, 2010
President Obama has signed the financial industry regulatory overhaul - officially, the Dodd-Frank Wall Street Reform and Consumer Protection Act. Predictably, what he said about it cannot possibly be true.
For example: "[T]hese reforms represent the strongest consumer financial protections in history. And these protections will be enforced by a new consumer watchdog with just one job: looking out for people - not big banks, not lenders, not investment houses - looking out for people as they interact with the financial system."
And: "[B]ecause of this law, the American people will never again be asked to foot the bill for Wall Street's mistakes. There will be no more tax-funded bailouts - period. If a large financial institution should ever fail, this reform gives us the ability to wind it down without endangering the broader economy. And there will be new rules to make clear that no firm is somehow protected because it is 'too big to fail, ' so we don't have another AIG."
Note that Obama did not promise to spare the taxpayers from having to foot the bill for the government's mistakes. He and the members in Congress know better than to make that howler of a promise. Nevertheless, the magnitude of the whoppers being told about this law is astounding.
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