Financial Regulatory Forum

Financial regulation reform is now law: what’s next?

By Reuters Staff
July 21, 2010

Can the financial regulation law signed today prevent another crisis? Garett Jones, an assistant professor of economics at George Mason University, led a debate today at the Mercatus Center in Washington D.C. on the path financial reform will take now that it’s the law of the land. Watch the debate below.

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SCIENTIFIC POLITICS, ANYONE?

Two of the most disreputable members of Congress sponsored and just caused to be enacted a so-called financial regulatory overhaul. The Dodd-Frank Act represents another expansion of politically-motivated, politically-manipulated Big Government. Now, the only question is which anti-capitalists will be interpreting and implementing the legislation.

Reminiscent of ObamaCare, the passage of which Congresswoman Nancy Pelosi claimed was necessary in order that everyone could learn what was in it, Dodd-Frank imposes a 2,300 page legislative leviathan that adheres to the guidelines endorsed especially by lawyer-politicians; namely, obscurity, subjectivity, and irresponsibility. The inescapable consequences include an uncertain context in which to operate for its many victims and certain profits for lawyers feeding off that uncertain context.

There is an alternative … Scientific Politics. It is scientifically-based and scientifically-driven. It adheres to the guidelines of scientific methodology; namely, specificity, objectivity, and accountability as described in the recently released novel entitled Inescapable Consequences (www.inescapableconsequences.com).

Admittedly, reform of federal legislative procedure should be only one part of a comprehensive reform of the federal government but reform guided by scientific methodology not political machinations. In this case, real reform would require a constitutional amendment to obviate politicians from repealing such reform at their earliest convenience. The amendment would be along the following lines:

1) Every piece of legislation must be limited to a single issue … no tacking on endless, unrelated amendments, as the politicians now do intentionally to confuse the issues, their colleagues, and mainly the voters.

2) Every piece of legislation must describe specifically and objectively the particular situation in question in terms of its context and the relevant factors (the ABC’s … antecedents, behaviors, and consequences) involved.

3) It must offer a resolution to the problem therein, beginning with a specific and objective definition of the problem-behavior involved. Then, having defined the problem-behavior, it must target the goal of the legislation … specifically and objectively. Next, it must present a plan … designed specifically and objectively … and the means of putting that plan into play. Lastly, it must provide for subsequent measurement of the consequences of the legislation for purposes of accountability to the citizenry.

4) It must cite the provision in the Constitution pertaining to such legislation.

5) Finally, explicitly stated in each piece of legislation must be the provision that should a plaintiff successfully demonstrate in federal court that any regulation written by bureaucrats to implement the legislation fails to conform completely to the underlying, authorizing provision, the court must invalidate the entire legislation; thereby, making politicians accountable for the bureaucratic consequences of their handiwork.

There you have it … legislative procedure based upon Science not Politics. It can be done … but will it?

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