Arnold Kling probably sets the seminal review of the new Finance bill. What I fear is the lack of punishment of any form for collusion, artificial Price mechanisms, and evasion of personal liability from both Regulation and banking practice. Malfeasance leaves the arena of crime, and enters the concept of personal misconduct. I wonder seriously if the Too Big to Fail concept is not the culprit which must be chained. Arnold considers the free insurance as the serious fault, while I think any insurance is the fault. He would charge banks for their criminal commission, while I insist that all such institutions have violated the Public Trust; necessitating their automatic break-up, requiring a redistribution at preferred rates of all investment and stock. I seriously believe in the idea of hanging them all separately, so We do not get hung collectively!
You can find the real difficulty with attempting to forestall the growth of corporate excess. This can be accounted by the constant, and massive, desire of the corporate structure to expand with their desired goals; all while Regulators maintain only a periodic and splintered overview of the progression. The Wilson failure to extract meaningful compliance from corporate structure highlights the advantage corporations possess over Regulators, who are most often minor officials of unknown reputation and inadequate Means. This is especially true in the realm of financing any public campaign for support–where Corporations overwhelmingly lead. There remains relatively no way to sway the Public, until the Public already has been victimized.
The difference in attitude between Government and Corporation can be highlighted here. Corporations are overturning Government efforts to restart the economy through disinclination to spend on Rehiring, even though they are enjoying record Profits. They are simply piling up Cash; which they will neither spend, or distribute to their Shareholders. The last estimate I have seen places this load at about $1.8 trillion, which relatively cancels the half trillion dollars expenditure allocated by Congress to restart the economy. Corporations were pulling Cash out of the economy faster than Government could shove it in. And everyone wonders Why Consumers are not back to Spending more, when Household Income is down, and Retail prices are up; though in this area, it is only under the periphery canopy of Corporations–Banking, Utilities, and Communications access. It all points out that sharp and heavy punishments must be outlined to fight the corporate structure under conditions of malfeasance of corporate officers. Will We witness such real impact?–not as long as the lobbyists prosper. lgl