The use of the word "reform" by the Obama Administration stretches credulity. How much protection did we get from the overbearing regulatory environment that our financial services industry already lives in? Numerous regulators, already, pore over the books and operations of our banks and other financial institutions, at great cost to all of us. None of this regulation helped. So, why should more regulators and more cost do us any good. The answer: it won't.
The right answer is to let bad banks (and other businesses) fail. We need to let those who make economic and financial mistakes take the financial consequences. Big government doesn't know anything and should never have bailed out any of the financial institutions. GSEs like Fannie and Freddie should not exist. These GSEs will always be accidents waiting to fail and to be bailed out by our already overburdened citizens.
The correct answer is to let the market work. That didn't happen in the events that led up the 2008 financial crisis. Instead, government recklessly pushed Fannie and Freddie into highly leveraged activity in increasingly poorer assets. Barney Frank deserves a large share of the credit for the 2008 disaster, although Bill Clinton, George Bush, Chris Dodd all deserve a gold medal for poor policy as well. All of these people thought that government should overstimulate the housing market and they all made sure that the government pushed both the private sector and GSEs to do a lot of stupid things. Now, they point the finger in another direction. Ridiculous.
Let the free market work. More regulation will not prevent future crises. More regulation will simply provide higher costs to be passed on to the average American citizen. If the government would get out of the way, our financial insitutions could do what they are supposed to do. If the government continues to strangle our financial institutions, lending will not return to the American economy anytime soon.
It is just a matter of time until we repeat the recent financial collapse, but next time it will be larger because of more regulation and the now fully implemented policy of "too big to fail." "Too big to fail" guarantees failure.