Financial Reform: More of the same?

Indeed, the current outstanding balance of overall Federal support for the nation's financial system...has actually increased more than 23% over the past year, from approximately $3.0 trillion to $3.7 trillion -- the equivalent of a fully deployed TARP program -- largely without congressional action, even as the banking crisis has, by most measures, abated from its most acute phases.

These are the words of Neil Barofsky, the Special Inspector General for the Troubled Asset Relief Program. He asserts that this was due largely to the government's pledges to supply capital to Fannie Mae and Freddie Mac and to guarantee more mortgages to the support the housing market. He went on to say that the TARP program has not "put an appreciable dent in foreclosure filings," i.e. the bailouts are not working.

So you'd expect that Fannie and Freddie, two government sponsored enterprises that were at the heart of the financial collapse, would be a main focus of the "monumental" financial reform legislation that was signed into law Wednesday by President Obama, right? Wrong. According to a report by the AP "[t]he bill doesn't include a fix for Fannie Mae and Freddie Mac."

So basically we have a 2,000-page law that is supposed to prevent another collapse like the one we experienced in 2008 and it doesn't even address two of the biggest players that helped to cause the collapse? Brilliant!