What we get from our leaders versus what we need

What we get is more "throw-weight", more B.S., more legislative "look what we've done on your behalf" posturing and less effectiveness.

ILLUSTRATION ABOVE AND ARTICLE TO FOLLOW FROM MARK PERRY'S CARPE DIEM WEBSITE:

http://blog.american.com/?p=16950

‘I Didn’t Have Time to Write a Short Bill, So I Wrote a Long One Instead,’ Part II

By Mark J. Perry

July 16, 2010, 8:05 am

Back in December, Nick Schulz helped put the size of the 2,074-page healthcare bill into some historical context by comparing its length to some previous bills that rank among the most consequential in U.S. history, like the 82-page Social Security Act of 1935 and the 74-page Civil Rights Act of 1964.

Now that Congress has passed the “Dodd-Frank Wall Street Reform and Consumer Protection Act,” it might be a good time to compare the 2,319-page financial reform bill (245 pages longer than the healthcare bill) to the previous bills listed below (and see graph) that are considered among the most consequential legislative acts for banking and finance.

1. Federal Reserve Act (1913) - 31 pages.

2. Glass-Steagall Act (1933) – 37 pages.

3. Interstate Banking Efficiency Act (1994) – 61 pages.

4. Gramm-Leach-Bliley Act (1999) – 145 pages.

5. Sarbanes-Oxley Act (2002) – 66 pages.

Like Nick said, the numbers pretty much speak for themselves, but I can’t resist making just a few comments:

1. It took only 31 pages of legislation in 1913 to create the nation’s central bank and establish the entire Federal Reserve System, with a Board of Governors and 12 district banks, as well as creating a single new U.S. currency. In comparison, just the table of contents (15 pages) and the list of definitions (11 pages) in the Dodd-Frank bill is almost as long as the entire Federal Reserve Act, and the total Dodd-Frank bill at 2,319 pages is almost 75 times longer.

2. One of the most major acts of banking reform in U.S. history, the Glass-Steagall Act of 1933, which overhauled America’s banking system following 9,000 bank failures in the early 1930s, took only 37 pages of legislation or 1.6 percent the number of pages in the Dodd-Frank bill.

3. The combined size of the five previous major banking bills listed above comes to only 335 pages in total, or about one-seventh the size of the whopping 2,319-page Dodd-Frank bill.

4. Many critics of the 61-page Sarbanes-Oxley Act argued that it could more accurately be called the “Accountants’ Full Employment Act of 2002.” Harvey Pitt, former SEC chief, has already referred to the 2,319-page Dodd-Frank bill as the “Lawyers’ and Consultants’ Full Employment Act of 2010,” and adds that “this legislation fixes nothing, accomplishes nothing, yet promises everything.”

What we need is more old-fashioned common sense and values. What a concept.

COMMON SENSE!!! VALUES!!! THE GOLDEN RULE!!!

Instead we seem content to continue on this path of calling the arsonists who set the fire to come in and put out the fire. That doesn't seem to make a whole lot of sense. Maybe we should have the burglars investigate and solve the crimes. Oh wait, we do have that in Washington. My bad.

Warren Buffet's self described right-hand man Charlie Munger gets right to the heart of the matter when he spoke before a group of USC Law students many years back.

USC Law: Speaker Charles Munger encourages a lifetime of learning

“The safest way to get what you want is to try and deserve what you want. It’s such a simple idea – it’s the golden rule, so to speak,” Munger said. “You want to deliver to the world what you would buy if you were on the other end. There is no ethos, in my opinion, that is better for any lawyer or any other person to have. By and large, the people who have this ethos win in life.”

Even Sen. Dodd while taking his victory lap of interviews for passage of this legislation -- that will do nothing but provide an appearance of accomplishment -- admitted that this bill will do nothing to prevent the worst elements of human behavior (greed, gluttony, avarice, coveting) to creep in and create a new crisis in the future. What is that line coaches often spew, "Don't mistake activity for accomplishment"?

Thanks, once again, for nothing Senator.


For an analysis of the plusses and minuses provided by the legislation, I give you the most recent article published by Mish Shedlock, who blogs at Mish's Global Economic Trend Analysis

http://globaleconomicanalysis.blogspot.com/2010/07/financial-reform-bill-was-stunning.html

Financial Reform Bill was a Stunning Success

To fully appreciate how amazingly good this piece of legislation was, we must look at the pluses (what the bill accomplished), the minuses (objectives the bill failed to meet along with any damages done), and the critical issue (reasonable expectations as to what the bill might have accomplished). Let's start with the minuses.

Financial Reform Minuses

Glass-Steagall: Paul Volcker supported provisions that were hopelessly watered down, so much so that they can accomplish nothing. This was a complete failure.
Derivatives Reform: Banks successfully lobbied for derivative exceptions big enough to drive the planet Jupiter through. They succeeded. Derivatives reform is meaningless.
Too Big To Fail: The reform bill did absolutely nothing to rein in the widely recognized "too big to fail" policies of the Fed. This was a complete failure.
Preventing the Last Crisis: There is not a single thing in the bill that can possibly be construed to have prevented the last crisis. This was a complete failure.
Preventing the Next Crisis: There is not a single thing in the bill that can possibly do anything to prevent the next crisis. This too was a complete failure.


Financial Reform Pluses

None. The bill accomplished virtually nothing.


No doubt quite a few inquiring minds will be wondering how a financial reform bill that failed at 100% of its objectives while accomplishing virtually nothing can possibly be considered a "stunning success".

This is where it pays to consider the crucial point: reasonable expectations.

Reasonable Expectations

The best way I can explain reasonable expectations is via an analysis of the Medical Reform bill, promoted, passed, and signed by President Obama even though a majority of US citizens were dead against it.

Medical reform did nothing to promote competition between states, nothing on tort reform, nothing to allow drug imports from Canada that would lower prescription costs and most importantly, nothing on reducing costs any step of the way.

That's the positive side of medical reform.

The negative side of the balance sheet is that medical reform will cost a trillion dollars while increasing costs on small businesses at a time we can least afford to make that critical mistake. Furthermore, the bill panders to public unions and their luxury 100% paid for plans that put upward pressure on healthcare costs.

Medical Reform vs. Financial Reform

Medical reform not only accomplished nothing, it actually made matters substantially worse.

In sharp contrast to medical reform, I cannot come up with any financial reform provisions that make matters substantially worse.

Given the absolute best we could ever expect out of a major piece of legislation supported and promoted by Obama is nothing, and given that nothing was accomplished with no major detriments making matters much worse, the financial reform bill must be considered a stunning success.

Indeed, we should all be thrilled by it.