Recently, I described financial reform as a “petri dish” of pending legislation. The government is tackling too many issues at the same time. Without constants—we don’t know how markets will react to all the moving pieces.
It gets worse. Last night The Wall Street Journal profiled the back-room deals working their way through pending legislation. I guess you can hide anything in a 1,500 page document. And those legislative walkabouts are what trouble me.
How can we trust financial reform when approval depends on non-related issues?
Here are five “amendments” that have nothing to do with sub-prime debt, banking leverage, or even the flash crash of two weeks ago. In keeping with the petri dish metaphor, I’ve dubbed them the “Fungus Five” because they call into question the Congressional focus on “getting it right.”
1. Traders don’t care about lead paint.
But Sen. James Inhofe has inserted an amendment to address what he sees as problems associated with lead-paint removal regulations. The Oklahoma Republican has drafted language to stall enforcement of an Environmental Protection Agency rule that requires special instruction and certification for contractors who remove lead paint.
2. Financial reform is not the place to address Congolese cassiterite and human-rights violations.
Sen. Sam Brownback (R., Kan.) and senators from both parties won passage of their amendment reining in the global trade in Congolese cassiterite. The measure would require anyone who buys cassiterite or a half-dozen other minerals abroad to certify to federal regulators that the sale did not directly or indirectly finance or benefit armed groups in the Democratic Republic of Congo accused of human-rights abuses.
3. Regarding Wall Street’s workplace conditions: the only risks are the things we eat like burgers, pizza, and all the stuff that stops blood flow to the brain.
West Virginia Democratic Sen. Robert Byrd’s amendment would “require the disclosure of safety and health conditions at risky workplaces (coal mines, refineries, oil rigs), and to empower the SEC and shareholders to compel disclosure and to seek civil penalties for those who fail to disclose this safety and health information.”
Prison Inmates.
4. Inmates and identity theft are not what ail Wall Street.
Sen. Dianne Feinstein (D., Calif.) and five senators from both parties want to keep prison inmates, many of whom hold data-processing jobs while incarcerated, from gaining access to Americans’ Social Security numbers, such as by seeing them on government checks.
“In 2009, more than nine million Americans were victims of identity theft, at an estimated cost of roughly $50 billion a year. These costs flow to financial institutions, retailers and consumers,” Sen. Feinstein said in an emailed statement. “I believe the financial reform bill is an appropriate vehicle for this bipartisan amendment.”
It’s a stretch, Senator.
5. A 700-mile fence on the border of Mexico won’t keep out synthetic CDOs.
For that matter, the fence won’t work if erected around the investment community in Manhattan. But here’s the good news. Senator Jim DeMint’s amendment failed to make its way into the 1,500 pages of pending legislation.
South Carolina Republican Sen. Jim DeMint’s proposal demanding that the U.S. finish work on the 700-mile border fence between the U.S. and Mexico within a year already has been withdrawn.
I’m skeptical what our financial overhaul, when passed, will accomplish. And the loss of focus, all those pet projects, are sure to undermine a terrific opportunity to strengthen the capital markets.
“The Oklahoma Republican has drafted language to stall enforcement of an Environmental Protection Agency rule that requires special instruction and certification for contractors who remove lead paint.”
Bravo. Lead paint went out of use 40 years ago, almost the same time the US banned leaded gasoline. The only effect of the EPA rule is to create pointless but expensive work.
Meanwhile, I have kids. However, I have never seen my kids or any other kids attempt to eat the paint on window sills. If high levels of lead are found in their blood, it is more likely because someone in the house brings in lead, such as with car batteries.