Financial Reform Bill Highlights the Need for Real Reform

Mark Trumbull writes in the Christian Science Monitor:

The US House of Representatives on Friday passed a bill aimed at preventing a repeat of the financial crisis that shook the global economy in the fall of 2008. The sweeping measure would transform the regulatory landscape for banks and other financial firms.

Although it drew immediate praise from the Obama administration and consumer groups, some financial experts warn that the economy will remain exposed to the risk of bubbles, busts, and firms that are “too big to fail.”

WallStreetPlunderIt’s what this bill cannot do that should be of concern to all Americans:

Economists are wary of saying that even a well-designed bill will prevent financial crises, which have occurred periodically before and after the modern era of central banking.

Simon Johnson, a finance expert at the Massachusetts Institute of Technology, recently praised Obama for pushing the idea of a new consumer protection agency for financial products. But, in recent testimony to the Congressional Oversight Panel on bank bailouts, he said Washington policymakers aren’t doing enough to rein in the economic and political power of large financial firms.

“The power of the financial sector [is based] on an ideology according to which the interests of big finance and the [supposed] interests of the American people are naturally aligned,” he said. “This ideology is increasingly … dangerous to the economy.”

Read Full article at Christian Science Monitor

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