Friday, July 30, 2010

The Barney & Chris Act

The Dodd-Frank financial reform act is another one of the bills where it had to be passed in all its 2500 page splendor in order to find out what is in it.
The Democratic PR machine has managed to convince many people that any law that interjects the government into private business (oil, banks, health care) is a good one. But as usual, the devil is in the details. The trumpets blared as the First Dope announced that any bank too big to fail would no longer be propped up by the US taxpayer.
Sounds good but how? Their solution is that any bank that was too big to be allowed to fail would be rescued by getting money from the other banks that were not too big to fail. Huh? I’ll say it differently. Big banks that do stupid things will be saved by smaller banks that do not do stupid things. They won’t be saved by smaller banks that do stupid things because these smaller stupid banks will be allowed to fail. The bill gives poorly run large banks a competitive advantage against well run smaller banks. Well run banks will have to charge more for their services than poorly run banks to cover their higher costs. This bill encourages people to take thgeir business to poorly run banks. Thus is the economic wizardry of the Democratic party members. What else can you expect from something named after Frank and Dodd?

There is more.

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