A new, untested bureaucracy? Oh Lord, I hope so...

The Financial Reform passed despite embarrassingly partisan opposition.  Senator Shelby decried the length of the law (!), the likelihood that American markets would become less competitive, and the creation of "unaccountable" bureacracies."  One would think that a two-year head start at opposition would yield a more meaningful cry of protest.

Clearly, reform was inevitable.  A New York Times piece from last week aptly summed up the era triggering the widespread change as follows:

"Usury laws were set aside. Banks were allowed to expand across state lines, sell insurance, trade securities. The government watched and did nothing as the bulk of financial activity moved into a parallel universe of private investment funds, unregulated lenders and black markets like derivatives trading."

Equally clear is the fact that administrations staffed by both political parties had a hand in the 30-year rush to deregulate.  What has yet to become as manifest is the need for both parties to work together to restore an equilibrium.  Here's a worthy starting point:  Federalizing all mortgage laws (and, in turn, mortgage terms).  The highways of Long Island are littered with billboards STILL proclaiming the availability of "no income check" home loans.  If these precarious practices continue as in the years leading to the Recession of 2008, the electorate won't just be universally accepting Washington, D.C. as a catalyst for change - it shall likely demand a strong government hand in preventing retail lending foolery altogether.

---JSC, 7/20/10