Wall Street Regulation

Congress is actually on the cusp of actually passed sweeping regulatory reform that the President will no doubt sign into law. Have I read the final bill? No. I will read a summary of it at some point in time, and I'm sure my employers research department will have something created to note the important parts. That noted, three things are crystal clear about this:

1. It is imperfect, and that's okay - Regulation is a messy business. Regulation HAS TO BE a messy business, as it is predicated on the notion of trying to qualify the worst of human behavior and then devise mechanisms to prevent that behavior from happening (or punish it when it does) in the first place. If you are over the age of, say, 20 you probably already realize that people are pretty complex organisms, and trying to figure out what they may do in a particular situation is never easy or simply. However, something imperfect but timely is better than something perfect that never actually arrives.
2. It is long overdue - There hasn't really been sweeping reform of the financial services industry since the Securities Act of 1934, so this kind of legislation is long over due. Yes, there have been tweaks and changes to the regulatory framework of the financial services industry over the years, but nothing to bring it in line with the complex products that now exist in the industry's ecosystem.
3. The idiots on both extremes will bash it - Fantasy Island living conservatives will have you believe that this legislation is an over-reach and that it shackles "free enterprise". They somehow want you to forget that it was the unshackled "free enterprise" of (for just one example) mortgage securitization that was at least partially to blame for our current economic pickle*. Business-hating liberals will have you believe that it doesn't interfere enough, as if Wall Street doesn't have enough lawyers employed to interpret legislation already. If the knuckleheads on both ends cry really, really loud, then that usually means that the legislation probably strikes the right balance.
   

An ancient Chinese proverb says that "a journey of a thousand miles starts with a first step", and that's what this is, a first step. Being an optimist, I'm positive that this step will help in some fashion. Perfect? No, nothing created by humans is ever perfect, so let's acknowledge the imperfection and allow this to work. If it doesn't, then it can be changed.


(*) That and the insane social policy that everyone should be a homeowner. Newsflash: only people that can afford to own a home should own a home.