Frank'nDodd's Monster

While I was away, Congress finally passed the Financial Regulation Bill we have all been waiting for since 2008.  The hosannas of the partisans and the wailing and gnashing of teeth of the opponents are quite amusing, to say the least.  For those not obsessed with following the details of financial legislation, here, in a nutshell, is a summary of the bill:

In the wake of a great financial crisis, Congress set out to write down new regulatory rules and ended up delegating the responsibility for making those new regulatory rules to a slew of agencies. So, the new financial bill does...well, it isn't clear what it does--now we have to wait to see what actual regulations are written by all these agencies who have just been told to write new rules.  Will they write good or bad rules?  There is literally no way to know.  Now this is an interesting piece of legislation--Congress gets to congratulate itself for passing a bill, but then if there are any problems in the future, the get to say, "Well, we didn't write that rule and it certainly isn't what we intended.  It was all the fault of that naughty regulatory agency!"  The first wave of this is already occurring in the credit rating world where one set of firms is required to provide a credit rating from a credit rating agency in order to issue new bonds, but credit rating agencies are refusing to let anyone use their ratings in issuing new bonds because they don't yet know about their legal liability in issuing those ratings.  So, the market for new bond issues has just screeched to a halt while everyone tries to sort this out.  Good luck getting a loan in the meantime.

In other words, when faced with writing a new set of regulations in the wake of the latest financial crisis, Congress decided to vote "Present."