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.

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