Blog 2.5 (Directors Cut)

The Question:
4.)        “On July 21, 2010, President Obama signed into law the Wall Street Reform and Consumer Protection Act…. unquestionably, the biggest change in the regulation of the financial industry since the aftermath of the Great Depression… the federal reserve would get new powers to look broadly across the financial system.  A council of federal regulators led by the Treasury secretary would help ferret out systematic risk.  A new consumer agency was created to help end the lending abuses and keep people from getting loans they could never hope to pay back…. The bill creates a process to liquidate failing companies, so that there is a reasonable alternative to bailouts.” (p 358)
            Are these changes enough to make you agree with President Obama’s assertion that, “because of this law, the American people will never again be asked to foot the bill for Wall Street’s mistakes?”   Why or why not?

The Answer:
Considering the history of our country, and probably the history of human civilization, just because we say something like "never again" it doesn't necessarily mean that there will never be similar problems that will occur somewhere or sometime further in the future. The laws that are passed in order to try and protect us can only do two things: 1) Try to prevent what happened before from happening again in the exact same way and 2) Try to prevent against whatever possibilities we can imagine might happen later in the future. If you notice, none of these two things is designed to prevent against everything bad that could possibly happen since it's hard to imagine a human being having the foresight to essentially predict the future and prepare for it in advance. Even the best laid plans run into unexpected problems or situations that require new ways of thinking to solve.

Maybe the government holds off on spending money trying to prop up the country when things go wrong for a bit, but who knows if that is really the best thing to do. I doubt this new legislation is so earth-shattering to dramatically change the nature of this country's financial institutions and if things get bad enough who's to say what options are brought to the table to fix them. People would probably do anything to keep this country afloat even if it meant breaking a promise. Of course, I hope it never comes to that.