This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Financial Reform, Washington Style - Gary Weiss

You can always tell what kind of reform is coming down the pike. Just clock the amount of agonizing involved. What you've been seeing in Washington -- tortured, soul-searching groping for a financial reform package -- is characteristic of what happens when Congress considers actually making things better. Note how much time it's taken for that to crawl through Congress, and look how it's been eroded every step of the way.

Remember that the actual financial crisis took place two years ago. But when Congress considers reforms of the second kind, the reforms that actually make things worse, it acts decisively, consistently, and with commendable strength of purpose.

Consumer bankruptcy laws are a good example of that. You have to go back to the late 1970s to find an era in which bankruptcy has performed the function for which bankruptcy is traditionally designed, which is to give overburdened debtors the opportunity to free themselves of crushing debt. Since the last major overhaul of bankruptcy laws was enacted in 1978, which resulted in a climb in bankruptcy filings because people were actually using the law, the banking industry has been on an antibankruptcy jihad. Beginning in 1984, one "reform" measure after the other, pushed by the banking lobby, has eroded consumer bankruptcy protection over the years, culminating in a 2005 Bush-era law that made it harder than ever for hard-up consumers to get a fresh start.

Just as "bankruptcy reform" crippled bankruptcy for consumers, the Private Securities Litigation Reform Act of 1995 made class action suits a nonissue for victims of crooked CEOs. Since class action lawyers have had their own spate of scandals, I haven't seen anyone other than trial lawyers complaining much about that. But the important thing here is the nomenclature.

This was not the Private Securities Litigation Castration Act, as it might have been more accurately named. The same can be said for tort reform, which actually means "Torts are OK," and "medical liability reform," which means "let medical errors go unpunished." Here you go -- the U.S. Chamber of Commerce can tell you about all the things it wants to "reform" out of existence.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BP $33.54 0.84%
BAC $16.34 -0.12%
C $53.48 0.38%
GS $188.60 0.45%
JPM $64.10 -0.05%

Markets

Chart of I:DJI
DOW 16,528.03 -114.98 -0.69%
S&P 500 1,972.18 -16.69 -0.84%
NASDAQ 4,776.5080 -51.8170 -1.07%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs