For Better Or Worse, Senate Passes Wall Street Bill

This article, written in NPR on May 21, 2010 describes the Senate-approved bill that was designed to take on the problems that led to the collapse of the economy. The bill is 1,400 pages and addresses twelve sectors of industry. Instead of bailing out financial firms considered too big to fail, the bill seeks to establish a process for companies to be dissolved by banking regulators, and predatory mortgages are dealt with through a proposed consumer financial protection bureau to police personal lending. Some senators, both Republicans and Liberal Democrats, think "we're left with a bill that enshrines into law failed policies of the past, imposes a massive new bureaucracy on small business that had nothing to do with creating the financial crisis and threatens jobs in our economic growth. The bill was passed with a 59-39 vote. House and Senate lawmakers will next hash out the major differences between their bills in a conference, which could take another four weeks. Oppositely, lawmakers say the key focus of the bill is restoring public confidence and proving that they "never, ever, ever again want to see you go through this because your government failed to establish the rules, the regulations, the safe guards against the behaviors that brought us to this point." The bill gives the government the authority to take over and sell off failing financial firms and creates a panel that's supposed to monitor large financial firms whose failure could present broad risks to the financial system. Pros and cons to this first authority are that the bill will allow firms to fail without bringing down the financial system without leaving taxpayers on the hook for bailouts, but many economists say that very large financial institutions will always be deemed too big to fail in a crisis. Secondly, the bill requires most derivatives to be traded on exchanges and to go through a central clearinghouse and makes banks spin off their lucrative derivatives units into separate businesses. Pros and cons are that it can move the risk associated with derivatives away from banks, but others argue that it could push derivatives trading overseas to less-regulated markets. Lastly the bill creates a new Consumer Financial Protection Bureau which will force lenders to give borrowers a clear picture of what they're getting into, but others say the agency may create regulations that burden lenders and drive up costs for borrowers.
We, students graced by the knowledge of Mrs. Kris Phelps, do not believe that the government and this bill will properly address the issues it attempts to correct. In some areas we do not believe that the regulations are strict enough while in others they inhibit the ability of the market to expand and grow. The Senate and House of Representatives are acting on their power to regulate commerce in the United States. They are also attempting to protect the citizens from making unintelligent choices, promoting the general welfare. Also, the process of making a bill is demonstrated by the fact that both chambers of Congress have passed separate bills and are now sending them to a conference committee.

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