"Too Big To Fail" Bill Unveiled By Treasury Department, House Dems

It seems that something may finally be done about the systemic risk posed by huge financial institutions. If a corporation is too big to fail, it either shouldn't exist or should pay the price for its failure. Incentives should be in line with the desired outcomes! I'm skeptical that this particular legislation will be successful in fully fixing the problem, however. It is better than doing nothing, but our political system is so highly penetrated by financial and business interests that even moderate legislation will keep from getting watered down later when the spotlight is off. There is no doubt in my mind that in a few years, when attention is diverted elsewhere, quiet lobbying efforts will result in eventual watering down of any remaining teeth in the measure that it will be worthless. After all, this is how we got into this mess in the first place. Look at the history of financial deregulation and other relatively unnoticed moves in Congress starting in the mid-1990s. (Yes, both parties can take the blame here.) Around $5 billion spent on lobbying by financial firms paid off handsomely, with the ability to engage in predatory lending free from enforcement, massive consolidation, lowered capital reserve requirements, and near unfettered freedom to create and sell complicated new financial products that no one understood - just to name a few. (see report at www.wallstreetwatch.org/soldoutreport.htm)

My pessimistic warning: unless we watch Washington like hawks, it will happen again!
Read the Article at HuffingtonPost