Monday, July 26, 2010

Of Mice and Loopholes

In true "better mousetrap" mode the moment a rule; regulation; or law is passed those who may be adversely affected by it invent a plethora of loopholes to circumvent it.
Actually the above is slightly naive as teams of attorneys and accountants are hard at work weeks before any actionable bill is passed into law.
This group of highly specialized homogeneous heroes of the corporate woirld fire up the old W-O-P-R as soon as a proposal to change things is suggested in congress or even the media.  They secretly 'what if' every conceivable outcome until all bases are covered and they cannot be hurt.
Their next move is to come with talking points to nudge the rule toward the least troublesome outcome.  This is done while bemoaning even that one as though it would hurt them and thereby be good for society.
If Hollywood produced the above it might be enjoyable but this is no War Game.  This is real life and in real life real people are hurt by these faceless groups.  They make it necessary to come up with new laws and rules and regulations.
Loopholes, by definition exist to navigate around the law without getting caught!
The latest example of all this is our Financial Reform bill.
Our nation and the World is still struggling to get out from under the crisis caused by greedy unscrupulous and politically connected people who saw the middle class and the poor as tiny reservoirs of liquidity upon which to binge.
Millions lost their jobs and nest eggs and homes.  When the government finally stepped in it was too late.
Mortgage backed securities had to face the reality that their realty business was a sham.  This reservoir was finite and the drought had begun.
Banks and banking institutions were and still are failing.
To temporarily halt the free fall into the abyss our government pumped more dollars into the dried up well.
Disaster abated - New disaster begins.
Relieved banks and bank boards used bailouts for bonuses and balanced balance sheets by breaking out the bad  from them.  No new loans were to be given out because they had to know what new rules and regulations were going to be put in place (wink - wink.)
Moving at governmental break neck speed proposals were put forth to stop future financial failures that would have far reaching consequences.  But with all the 'no-strings attached' excess tax-payer cash and one political party hell bent on the other's failure the industry once again cranked up the lobbies and turned the W-O-P-R back on.  The loophole express was leaving the station - All Aboard!
How about a nice game of chess?
The final result of this latest in a long line of DC ballets came last week in the form of a 'reform' bill.  This one curiously excludes from scrutiny; regulation; or punishment so many businesses and industries as to render it totally ineffectual.
It has been said that one loophole can neuter a bill.  This one makes eunuchs of us all!
We finally built a better mousetrap unfortunately we needed to catch rats.

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