Recently, Congress passed the Dodd- Frank Wall Street Reform and Consumer Protection Act, aimed at “fixing” the financial services industry so that collapses of companies such as Lehman Brothers can’t occur again. Sounds like a familiar approach to an old problem – remember WorldCom and Enron? Congress’ approach then was to pass the Sarbanes-Oxley Act. Sarbanes-Oxley was signed into law in 2002. As of today, there are still portions of the law that have not been fully implemented. The constitutionality of SOX was reviewed by the Supreme Court this year and, with the exception of one small provision unlikely to matter very much, it was found to be constitutional. Has SOX really changed anything or can the pros on Wall Street figure out a way to circumvent any laws that are implemented in a knee jerk reaction to the latest scandal or scam? My money is on the Wall Street guys every time to figure out a way to “legally” get around the law as it currently exists and new ones as they get passed.
This new law, the Dodd Frank Act, is contained in over 2,300 pages of text. Seriously – War and Peace isn’t that long. How many people can even fathom reading that much legal mumbo jumbo – and seriously, how many of the US Congress actually read the entire thing and even know what is contained in it. The head of the Securities and Exchange Commission (the “SEC”) estimates that the SEC will have to hire 800 employees just to deal with the burdens imposed upon the SEC by Dodd Frank. At a minimum, the SEC will have to implement 243 rulemaking actions, 95 one-time studies and 17 periodic studies. So while the SEC gears up to hire the staff to accomplish all of the requirements of the Dodd Frank Act, who is going to be regulating the Wall Street guys? It seems fair to assume that hiring 800 employees will cost the US taxpayers a lot of money.
Is it worth it or is this just another case of the government passing the cost of everything that goes wrong on Wall Street on to the US taxpayer. Why don’t we tax the Wall Street guys or set them up with some type of self-regulatory agency – oh wait, they have that don’t they. The New York Stock Exchange is supposed to be regulating its members. The members of the exchange and the companies listed on it should be paying for all costs of implementing these new laws. Face it, they made the money off the old scams and the failure of the government to regulate them. But, in fact, no law can regulate people who are criminals or those who lack a moral compass. When we were growing up, we did the right thing because we were raised to and we were raised to take responsibility for our actions. Businesses no longer have to take responsibility for their actions. They simply mess everything up and wait for the government to bail them out. And guess who pays for it – right, the taxpayer.
But who is helping the taxpayers? No one. I recently attended an event in Los Angeles sponsored by JP Morgan Chase that was designed to help people seeking loan modifications. Well, that is what it was billed as. In actuality, Chase just wanted to get people to sign their loan modification agreements, which from what I heard from people that were there, amounted to tucking arrearages to the backend of mortgages for properties that were upside down without any principal reduction or a reduced interest rate for some initial period of time. But all of these bankers, including Fannie Mae and Freddie Mac, were bailed out by the taxpayers. So while we are paying for their bailouts, the ones who were bailed out aren’t helping the people who have to pay for the bailouts. Something is really wrong with this picture. Why is this so and why can’t the American taxpayer get any help. Is it because we don’t have any lobbyists speaking for us or are we considered too stupid and na�ve for Congress to concern itself about us?
Of course, the great unknown for the American taxpayer is how much the Obama healthcare plan is going to cost the American taxpayer. I have yet to talk to anyone – Democrat, Republican or independent – who is for this plan. But yet, it was passed amidst a great deal of fanfare without anyone ever really getting to see what the law contains until after it was passed. This law is going to also cost the taxpayers significantly. How much is unclear. Why – because companies such as WalMart don’t want to have to reduce their profitability by providing healthcare coverage for their employees. So it is now the American taxpayers problem to provide them with healthcare coverage. Again, the taxpayers are bailing out big business. Again, why?
There is nothing wrong with being profitable and giving shareholders a return on their investment. But it has to stop being done on the backs of the American taxpayer. How many future generations of our children and grandchildren are going to have to pay for the wrongdoings and corporate greed of companies through bailouts and the costs of an ever-growing federal bureaucracies which will generate more and more laws and regulations that will overwhelm and force small businesses out of the market, while making the big companies insulated from their greed and corruption by eternally approving bailouts and passing laws that make the taxpayer pay for employee benefits such as healthcare?
For my part, I have had enough of Congress taking money from lobbyists and others and then paying these folks back by burdening the American taxpayer with all this bureaucracy, bailouts and unnecessary laws and regulations. It is time for real corporate accountability and a moral compass for these people so they stop spending their time figuring out ways to make money by circumventing the law. It is time for the American taxpayer to get a bailout or some help or just a thank you for paying for all these bailouts and costs associated with all this regulation. So, Wall Street, straighten up and fly right and stop taking advantage of the American taxpayer – give us a break for once!
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