Joe Levi:
a cross-discipline, multi-dimensional problem solver who thinks outside the box – but within reality™

H.R. 4173, the Financial "Reform" Bill

The House and Senate are expected to vote on the final version of the “financial reform” bill this week. The bill, H.R. 4173 is 2,319 pages long and misses the point in trying to “reform” our financial system.

A constituent in our precinct who opposes H.R. 4173 wrote the following and is allow us to republish it here. You may borrow from or copy the letter if you would like.

Please OPPOSE on the Obama-Dodd-Frank financial “regulation” bill, H.R. 4173. It does not address the root-causes of the financial crisis.

The financial crisis was caused by:

  • The Federal Reserve keeping interest rates artificially low
  • The Federal Reserve inflating the money supply to satisfy Congress’s deficit spending
  • Government policies encouraging or forcing financial institutions to issue credit to undeserving people

Together, these policies caused the sub-prime mortgage crisis and the mal-investment of easy money. The result was what historians are calling the Great Recession.

What does the Obama-Dodd-Frank bill do to address these problems? NOTHING! Instead, it sets up a “Consumer Protection” agency whose regulations will conflict with other regulatory agencies.

  • Congress wants to continue the policy of pressuring lenders to continue lending to borrowers with bad credit
  • And then when those borrowers default, financial institutions will be blamed for “predatory lending”
  • And I won’t be surprised if some of these institutions are bailed out at the same time that they are being scapegoated

Worse, the Obama-Dodd-Frank bill will create armies of new regulators determined to harass Main Street businesses who did nothing to cause the crisis.

The only good aspect of the bill, an audit of the Federal Reserve, was severely weakened in the conference committee.

But the main problem with this bill is that it increases the power of the very people who helped create the crisis. Consider these insights (

  • Donald L. Kohn, vice chairman of the Federal Reserve Board: “Many central bankers and economists, myself included, were a little complacent coming into the crisis. We thought we knew enough about the basic structure of markets and the economy. . . . The reality is that we didn’t understand the economy as well as we thought we did. Central bankers, along with other policymakers, . . . failed to foresee or prevent a financial crisis.”
  • Economist Arnold Kling: “The regulators made the same cognitive errors as the regulated.”

Politicians and regulators do not know any more about the economy than the businesses and consumers they regulate. But Congress can do much more damage than any business can:

  • You have vast powers to create laws and regulations that impact the entire economy — no business or consumer can do that
  • You suffer no personal consequence equal to the vast size of the mistakes you make, plus
  • You have a disturbing tendency to bailout big businesses and special interest groups to protect them from the consequences of their mistakes

At the heart of the problem is the fact that government is a monopoly. And the solution is for you to restore my freedom to choose. Ending the Federal Reserve’s monopoly control over what I use for money is a good place to start:

  • Americans are essentially forced to use just one currency unit, the dollar
  • The dollar’s value is NOT determined by the free market, but by the Federal Reserve Board
  • This monopoly control by the Fed causes wild price fluctuations and mal-investments in a complex economy

Ron Paul’s Free Competition in Currency Act provides the real financial reform we need. It repeals the legal tender law and allows other forms of money to compete.

  • Individuals and businesses could negotiate their own terms of purchase, using any form of money they mutually agree on
  • The open competition will force the Federal Reserve to stop inflating, thereby ending the booms and busts caused by the Federal Reserve’s policies
  • Power and choice will be in the hands of the consumer

I insist that you oppose the Obama-Dodd-Frank financial reform bill, H.R. 4173. Instead, Support the Free Competition in Currency Act!

If you are a constituent in the Syracuse 08 precinct with an opposing viewpoint, please contact us and we will publish your letter here as well.


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1 Response

  1. joelevi says:

    H.R. 4173, the Financial “Reform” Bill… #utpol

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