Comment on Politico article “Republican party relents, Wall Street debate open: I thought Congress controlled the purse strings

An article in published today in Politico discussed how Republicans have backed off on challenging bringing debate to the senate floor over the financial regulation bill.  In general, Senator Dodd has not explained fully why we need to create a shadow bankruptcy process to wind down so-called covered firms. Our current bankruptcy court system has the expertise to reorganize and if need be liquidate these companies.

An industry-financed fund would have more teeth if, in addition to buying up assets, it were allowed to sell assets off to make a profit and sell shares in the fund itself so that the fund would have access to capital from private parties.

I can see “light-touch” regulations requiring the fund to be adequately capitalized but that should be the extent of government involvement in the fund.

Regarding a consumer protection agency, Senator Shelby is right to step away from negotiations on that issue. A consumer protection agency, crawling with Elizabeth Warren types, would engage in regulatory creep and slowly but surely expand its defacto jurisdiction into areas that regulation should not go.

About Alton Drew

Alton Drew brings a straight forward and insightful brand of political market intelligence. Alton Drew graduated from the Florida State University with a Bachelor of Science in economics and political science (1984); a Master of Public Administration (1993); and a Juris Doctor (1999). You can also follow Alton Drew on Twitter @altondrew.
This entry was posted in Economy, Financial Regulation, Political Economy and tagged , , , . Bookmark the permalink.

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