Wall Street Reform

The second of Obama's 3 pillars of domestic reform (healthcare, finance, and energy) has made some major headway in the last few days. The House passed the Wall Street reform bill in the wee hours of this morning, and it is expected to clear the Senate and make it to Obama's desk before too long.

This Wall Street reform was the most popular of the pillars, for fairly obvious reasons...the American people are still upset with Wall Street for the housing bubble burst that spurred the recession that we are finally climbing out of. While it is more popular than healthcare and energy reform (which will actually be easier to pass in the wake of the oil spill), I think it is going to bring the Obama administration equal trouble.

What this reform does is basically place a lot more oversight on the finance industry by means of an expanded bureaucracy and tougher regulations. Frankly, the bill is very tough to explain, and that is a major issue facing the Democrats right now. Just as with the healthcare bill, this one is huge and complicated. Just as Nancy Pelosi admitted that how Obamacare was going to work was somewhat of a mystery, Chris Dodd has said the same thing with this finance reform. The thing is, it's hard to predict with absolute certainty anything that hasn't been done before. Only time will decide if the Democratic Party's diving into uncharted territory will be considered brave or foolhardy. In the short term, this will most likely be disastrous for the party.

People don't fully understand this legislation. Or the healthcare legislation. People fear what they don't understand. People don't understand it because Congress doesn't seem to understand it either. It's tough to explain to people what you yourself don't comprehend. Also, a lot of Congressmen don't bother to read the entire bill before voting on it.

America's biggest concern right now is jobs. Unemployment is still officially at 10% (probably higher), while the number of unemployed people getting zero unemployment benefits is creeping upwards. Job reports show that since Obama took office, we have been losing fewer and fewer jobs, before adding jobs starting in January this year, as evidenced by this chart:

**I realize the partiality of this chart, being from Nancy Pelosi's blog. You can check the actual numbers here. It is also important to note that this includes public sector jobs, meaning 400,000 of the jobs added were part-time census workers.

Anyway (I'm starting to digress), what Americans want to see right now are immediate, tangible results to real problems. They want to see the beaches along the Gulf Coast clean, and they want to have jobs. This finance reform isn't going to create many jobs or clean many beaches. What it will do is minimize the risk for another economic collapse by means of more oversight from a bloated bureaucracy and more restricted access to credit. When people are looking at the immediate, tangible results of the bill, they see the government barging in and saying they can't borrow money like they used to. They aren't going to appreciate the safeguards against economic collapse, because that isn't something that you can directly attribute to this bill. Even if it works to perfection, all that means is that our economic system will function normally. It isn't going to wow anyone. There will be winners and there will be losers, and the losers always cry louder.

Critics don't believe that the government is being tough enough on Wall Street. Banks are still going to be subsidized and "too big to fail," and many banks won't see a difference in the way they do business. But at the same time you can't really punish an industry that our economy relies so heavily on to function by incapacitating them.

The Obama Administration (and the Democratic Party) is bringing sweeping change to this country. It's just not the change that people want to see right now. The Democrats will suffer badly at the polls this November. The country has a lot of problems, and the party in power always pays the price for that. I do like that the Democrats seem so committed to the change they promised. I think that the three pillars will ultimately help the country, and the Democratic Party seems willing to take a huge bullet by seeing them through to the end. I see it as an honest desire to better the country, not the usual political point puppet show. Not many Congresses have the guts to see such legislation through, because the need to face the short-term issues weighs far more heavily on elections.