A Wall Street Journal editorial column on the effects of Dodd-Frank notes that a summary describing the bureaucratic mess the bill creates takes up more than 150 pages. The summary was prepared by the law firm of Davis Polk & Wardwell. It takes only a couple of paragraphs to identify the real beneficiaries of financial "reform."
Because Congress abdicated its responsibility to set clear rules of the road, the lobbying will only grow more intense after the President signs Dodd-Frank. According to the attorneys, "The legislation is complicated and contains substantial ambiguities, many of which will not be resolved until regulations are adopted, and even then, many questions are likely to persist that will require consultation with the staffs of the various agencies involved."
In other words, the biggest financial players aren't being punished or reined in. The only certain result is that they are being summoned to a closer relationship with Washington in which the best lobbyists win, and smaller, younger firms almost always lose. New layers of regulation will deter lending at least in the near term, and they are sure to raise the cost of credit. Non-blue chip businesses will suffer the most as the financial industry tries to influence the writing of the rules while also figuring out how to make a buck in the new system.
Yet another exercise in stimulating the Washington, DC economy.
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