Wall Street Reform That Isn't

President Obama lauded Senate passage of the Dodd-Frank financial overhaul, saying that "because of this bill, the American people will never again be asked to foot the bill for Wall Street's mistakes."

That statement is untrue.

Instead of ending tax-paid bailouts of politically favored corporations that are "too big to fail," Dodd-Frank makes the process permanent.

The only thing Dodd-Frank has changed on bailouts is this: Before the bill was passed, bailouts had to be approved by Congress, as with the $700 billion Troubled Asset Relief Program first proposed by President Bush and then extended by Obama. But in the future, thanks to Dodd-Frank, instead of congressional votes, Treasury Department bureaucrats will unilaterally decide under the bill's "orderly liquidation process" how much of the taxpayers' money to hand out to troubled firms.

Worse yet, according to the Judicial Conference of the United States, Dodd-Frank makes tax-paid bailouts of selected corporations permanent in a manner that overrides the bankruptcy process established by the U.S. Constitution.

"This is a substantial change from the bankruptcy law because it would create a new structure within bankruptcy court and remove a class of cases from the jurisdiction of the bankruptcy code," the conference said in a recent letter to Senate Judiciary Committee Chairman Patrick Leahy.

To paraphrase Mark Twain, despite consuming more than 2,300 pages, Dodd-Frank bears the same relationship to reform as "lightning" does to "lightning bug." The terms sound like they are connected but in reality are entirely different.

Read more at the Washington Examiner