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Scott Brown shows why compromising is a fool's errand.

Posted by Arkady K. On 10/09/2012

The race between Scott Brown and Elizabeth Warren is much closer than many have anticipated.  As a resident of Massachusetts my personal observation is such that the race has been rather "civil" other than the whole Cherokee kerfuffle.   However one thing that does jump is the occasional reference to Brown standing with Wall St. against the little guy.

Why is this odd?

Well, because Scott Brown was the only Republican to vote for the Dodd-Frank bill.  In fact you could say he was a critical bill passing vote. This may have to do with him catering to his consistency or it may have everything to do with his principles that are built entirely on quick sand.   A man who wrote a portion of RomneyCare and then beamed with pride while announcing that is not a man who views limited Government as a fight worth pursuing.  Still, the reason for why a politician does this or that is best left to folks smarter than me.

So how is it that the Warren campaign effectively framed Brown as pro-Wall St. while Warren is the champion "of the little guy"

According to the Boston Globe, even though Brown voted for Dodd-Frank he also actively sought to loosen a provision and this action alone negates him voting for a bill that every Republican in the House AND Senate was smart enough to avoid.  Tough crowd:


But e-mails obtained by the Globe show that Brown’s work on behalf of the financial sector did not stop when the law was passed. In the second stage, as regulators began the less publicly scrutinized task of writing rules amid heavy pressure from the banking sector, Brown urged the regulators to interpret the 3 percent rule broadly and to offer banks some leeway to invest in hedge funds and private equity funds.
Supporters as well as critics of the banking industry agree that Brown’s suggestions would mean looser regulations for banks, though specialists disagree on the extent of the impact.
The liberal blogosphere from HuffPo to DailyKos jumped at this like a bunch of starved beasts.  Who can blame them though? 

What is of course amusing is that people actually believe that Dodd-Frank somehow protects the average middle-class American and punishes Wall St.  First of all, the amount of paper work and regulation is staggering, truly staggering:

The Dodd-Frank law has 849 pages, compared with 66 pages in the Sarbanes-Oxley Act, a 2002 law that overhauled accounting rules following the Enron scandal. The landmark Glass-Steagall Act, which created the Federal Deposit Insurance Corp. and barriers between commercial and investment banking during the Depression, was a slim 34 pages.
"Dodd-Frank is Sarbanes-Oxley on steroids. It's an exponentially greater volume of regulation," says Margaret Tahyar, a Davis Polk partner. The "sheer number of rules still in the pipeline makes it almost inevitable agencies will miss an increasing number of deadlines over the next year."

This is absolutely phenomenal and takes an already highly regulated industry, finance, and makes it a jungle of complex rules, laws and provisions.   Remember, how Sarbanes-Oxley was supposed to solve corruption and protect the financial industry?   As far as Glass-Steagall is concerned, I have written a post that demonstrably shows that the law was written by the banks, for the banks to punish other banks.  This unfortunate fact has permeated the law writing process to such a extent that it becomes impossible to understand for whom, by whom and for what purpose any law is written.

Dodd-Frank gives more power to the Federal Reserve (asleep at the wheel in 2007 and actively involved in blowing the housing bubble) and creates a bailout mechanism for too-big-too-fail companies that creates a moral hazard by mandating that other large companies bail each other out in case of failure.  That is just the tip of the iceberg.

Finally the amount of caps and restrictions on fees that banks are allowed to collect have simply been shifted into maintenance charges and other payments that will simply be extracted from the public.  We are talking tens of billions here that will be made up through various checking/transaction/maintenance/etc fees that will without a doubt hurt the lower/middle class the most.

Still, image and propaganda rule the day and many Americans who erroneously believe that Dodd-Frank will solve problems or prevent a repeat of the housing collapse will be quite angry at anyone they perceive to be against this bill.

This is the legislation that Scott Brown thought was worth voting for.  Despite being solely responsible for allowing this monstrosity to wreak havoc on us he is now being nailed by the liberals in MA for standing with Wall Street.  This is truly a sad example of what happens when you exchange your principles for the purpose of winning a re-election,  assuming there were any in the first place.   The irony here is that Brown might very well lose for "standing with Wall Street".  Even if he was for it before he was after it or however the saying goes.

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"It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.” - M. Rothbard