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Rather than outlawing “too big to fail” and government bailouts, the financial reform bill unveiled by Banking Committee Chairman Chris Dodd (D-Conn.) doubles-down on these bad policies. It proves yet again the Democrats’ eagerness to exploit a crisis to assert control over the private sector.
If the Democrats were serious about financial reform, they would curb the power of the Federal Reserve, end “too big to fail” and start winding down Fannie Mae and Freddie Mac. It does none of these.
This bill, endorsed by President Barack Obama, is Sarbanes-Oxley on steroids.
Like Sarbanes-Oxley, it is reactionary legislation that’s more likely to hurt U.S. businesses than reform the financial system... Sadly, the Democratic bill’s embrace of unchecked new power for the Federal Reserve and its endless bailouts of “too big to fail banks” is sure to perpetuate the bubble-and-bust cycle — most likely leading to another banking crisis...
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Instead of requiring the Fed to submit to needed oversight and limiting its reach, the Democrats are giving it even more power. Dodd’s bill expands the Fed’s authority, even as it remains shrouded in secrecy and refuses to provide information on which banks received trillions of taxpayer bailout money.Full op-ed hereBefore Democrats rush to give the Fed even more control of the economy, we first need all the information it has refused to share about its activities leading up to the 2008 financial crisis and the bailouts that followed.
I’ve championed legislation to audit the Fed. It has strong bipartisan support in the House and the Senate. A full Fed audit must be part of any real fiscal reform.
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