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Friday, September 17, 2010

Things Laws Cannot Fix

Last July, while I was enjoying my blog hiatus, the long-awaited government response to the economic meltdown of 2008 was passed into law by the President. It was a 2,300 page bill, called, the Dodd-Frank Act.

This legislation calls for the establishment of a new federal agency: the Consumer Financial Protection Bureau. The Seattle Times wrote: "This new agency is intended to protect the interests of the average Joe. Housed in the Federal Reserve, it is designed to protect consumers from predatory lending, hidden credit-card fees and the like."

The Dodd-Frank Act has been called, "the most sweeping financial reform since the Great Depression." It not only addresses the $615 trillion-dollar over-the-counter "dark market" of derivatives, but other financial concerns, such as mortgage practices, credit-card fees and car loans. For a brief summary of the law's main points, see http://www.politifact.com/truth-o-meter/promises/promise/422/create-new-financial-regulations/.

Some people feel the new law does not go far enough, while others feel it goes too far. That's what debate is all about.

In principle, I am not opposed to government oversight in areas that affect the health and well-being of the general public. As mentioned last week, one of God's purposes for civil government, according to Romans 13, is to reward those who do good and punish those who do evil. This is necessary in a fallen world.

But will the 2010 financial reform act keep us from experiencing future meltdowns?

Senator Christopher Dodd, co-sponsor of the bill, proclaimed: "I regret I can't give you your job back, restore that foreclosed home, put retirement monies back in your account. What I can do is to see to it that we never, ever again go through what this nation has been through."

Never, ever again? No doubt the shapers of post-Depression financial reform had similar thoughts.

Yes, I think the new laws may help solve some problems. They may cause others. But there are things laws cannot fix.

Not even God's laws can change the human heart.

To be continued...

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1 comment:

  1. I have not read that 2000+ page new law, but I expect it is a step in the right direction.

    What concerns me about our current "fix" is that the two sharpers who partnered with Greenspan to lead us into this peril, are still on the president's financial advisory staff. Unlike Greenspan, they have not publicly stated, "I was wrong." Why are they still leading us?

    Further, the federal mortgage giants Freddy and Fanny don't seem to be under any new regulations. Are they addressed in this new bill? I still hear of "no or little money down" mortgage schemes. This perplexes me.

    Could it be that we are regulating the private sector, but giving the government a free pass?

    I'm intrigued by the would-be politicians who vow to take a smaller salary until our current economic woes are over.

    I'm hopeful that we can hear the message loud and clear, "Reward for ethical hard labor is good. Personal responsibility is good." Laws that hold people and companies and governmental entities accountable, rewarding the good and punishing evil, are good.

    We need to be held accountable for the spirit of the good laws. Otherwise, people with low ethics and high IQ's will get a free pass.

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