6.25.2010

Financial Regulation Reform Creates Uncertainty

Well, it looks like we have another 2,000 page effort out of Congress that promises to change the way Americans go about their lives, for better or worse. However one may view the bill, and despite potential benefits, there is undoubtedly a downside to its seemingly inevitable passage; it is yet another example of how the American political process produces results that don't reflect the will of the majority while creating uncertainty.

In any bill of this size, many provisions exist that could not pass on their own. Though some might view this as a good thing, many take the view that bills should not exist solely as vehicles to pass otherwise unpassable legislation. This same thing happened with the healthcare bill, and many famous examples have been provided by annual budget bills passed by both sides of the aisle through the years.

Perhaps this is just the price of getting things done however. The American political system remains one of the most representative in the world, and it is tough to see how anything would get done without the type of compromise which gets unpopular pieces tacked on to the whole.

However there is still the matter of uncertainty. Notably, when one of the authors of the bill claims that no one will actually know how it will work until everything is in place, it should be a strong indication that there will be surprises to come.  Particularly in a poor jobs market, uncertainty will be a negative for those among the 10% of our population who are unemployed and whose hopes are pinned on the very companies who will move forward wearily in an uncertain world.

As noted above, this may simply be the price of democracy. And you certainly won't find anything so helpful as a suggested remedy on this page, at least not today. However, it would be nice to believe that someone on that hill in Washington knew what they were crafting, then passing, before it becomes an integral cog in our economic machine. Then again, maybe that is just too much to ask for on a summer Friday...

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