From the Heritage Foundation we learn:
That's great - I know everyone hears the word "derivatives" and they get all jealous about those "greedy fat cats." The reality is financial ingenuity has been the source of American economic power. Sometimes, things like "junk bonds" go bad...sometimes things like "derivatives" do well. There is (was) not guaranty.
Have things gone badly in the past couple of years in the financial services sector? Absolutely...$245 billion in bank bailouts is baaaad. Oh, $169 billion of that has already been paid back. And let's not forget that a lot of institutions were forced into taking the TARP funds whether they needed them or not. To put it further in perspective, the Savings and Loan bailout of 1989 cost us $289 billion in 1989 dollars and we didn't get a dime of that back. Where's the crisis?
It seems to me what this legislation achieves is three things:
2. It is the final act in a struggle that has been going on since the 1930's - the fight between a culture of independence and dependence. One could argue that this struggle has actually been going on since 1865, as Herman Melville observed in "Conflict of Convictions:"
Independence has it's ugly sides - depressions, recessions, frauds and scandals. But it has also raised more people out of poverty and mediocrity not only in this country, but around the world - independent financial markets have provided the capital for a world that our grandparents could not have imagined. Dependence is steady - it's gruel and gray...it looks like East German housing. Wall Street has represented the independence, the Iron Dome of Washington represents the opposite.
3. It is a progressive's dream: unchecked state control over the financial sector.
I pray it will be defeated, but fear we will have to wait for a brighter day. Mencken was right: "the American people deserve what they get, and they are going to get it good and hard."