WASHINGTON -- If there's one thing the government produces in abundance, it's rules and regulations. And the U.S. Senate is about to dump a load of them on the financial industry.
And not just on Wall Street, which is the financial bill's chief focus, but on Main Street, too, and every nook and cranny of the business community.
This is not to say that regulations aren't needed to insure that the investment sector is run honestly, but too many of them come at a huge cost to the economy and have unintended consequences.
We are beginning to see some of those consequences from the health care reform bill in rising insurance premiums, companies taking charges that reduce earnings to offset higher health care costs and taxes, and medical device firms cutting their payrolls to offset taxes.
The Senate's 1,500-page financial regulation bill that Democratic Leader Harry Reid attempted to ram through in a few days has been slowed down in recent weeks by something called "due deliberation," which seems to rub impatient Democrats the wrong way.
But Alabama Sen. Richard Shelby, the Banking, Housing and Urban Affairs Committee's wily ranking Republican, was in no hurry. "Remember, this affects all of our economy -- everything," he reminded his colleagues.
And Republicans were in no hurry to pass what is a classic case of overregulation that would impose draconian rules on the nation's financial system that economists said wouldn't stop another financial meltdown from happening again anyway.
As a result, few changes were made in the legislation, including the elimination of the $50 billion slush fund that Republicans said would encourage future bailouts. But what remains in the bill are rigid, anti-growth provisions that will straitjacket American competition and innovation here and abroad.
The bill's consumer protection agency would be given free rein to poke its nose in just about every economic transaction, writing new unforeseen rules that will raise the costs of doing business. Its uninformed anti-derivatives provision is so counterproductive that some of President Obama's own economic advisers oppose it.
"One of the dangers of the Senate financial reform bill is that it includes so many provisions that could damage the financial services sector that just fixing one or two would not even come close to making it an acceptable bill," Heritage Foundation analyst David John told me.
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