Paul Jacob

It’s hot this summer, with public anger toward Washington — the White House, Congress, Democrats, Republicans — bubbling up like an asphalt parking lot.

After passing TARP and the stimulus and a federal takeover of healthcare, all of which were done over the objection of the American people and all with political pork stuffed every which way into the process, this past week Congress passed a financial regulatory overhaul that might just possibly possess majority public support.

The Washington Post, big government’s paper of record, called the 2,300-page financial reform legislation a “significant legislative victory for President Obama, who had pledged to rein in the reckless Wall Street behavior behind the crisis and to right the government regulation that failed to prevent it.”

As a fan of the free market, I too believe Wall Street acted recklessly. For their recklessness, the people involved should have paid a price . . . in the marketplace. But I also recognize that government not only enabled this gambling attitude among financial players, it even encouraged their mania. Then, when the financial markets blew up, the Feds bailed out those responsible.

I wonder: What happens when bad behavior is handsomely rewarded?

But now, with this new reform bill, the problem is fixed. Never will there be another economic bust; nor any need for those despicable bailouts. [Stop laughing, and read on.]

Well, the Wall Street Journal summed it up nicely:

Despite creating the new consumer watchdog, the bill leaves America's patchwork regulatory framework largely intact, and most of the players will be familiar. That has irked critics on the left and right who say one of the bill's key flaws is that it relies on the judgment of officials rather than hard rules. . . . Conservatives worry regulators will throttle the industry. Liberals worry they'll be co-opted by banking lobbyists.

What if, on this issue, bipartisan fears are right? Both liberals and conservatives will likely be proven clairvoyant: Regulators will throttle much of the financial industry while being co-opted by the better connected interests. Arbitrary government at its worst.

Paul Jacob

Paul Jacob is President of Citizens in Charge Foundation and Citizens in Charge. His daily Common Sense commentary appears on the Web and via e-mail.