Financial regulation and health care, but no solutions on jobs or the U.S. debt.

• Author: Heffes, Ellen M.
• Position: Editor's page - Editorial

On July 16, the day after Congress passed the Dodd-Frank financial regulation that "remakes the U.S. financial landscape" (as characterized by The Wall Street Journal's headline), the stock market closed down 261 points. While some commentators said it was due to a report of diminished consumer sentiment and lower-than-expected earnings of two major banks, I believe differently.

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First, I don't believe what is said about why the market moves up or down, but that's another subject. The new financial regulations will be creating new agencies and businesses will be inundated with yet an additional 2,300-plus pages of staggering and confusing new rules and regulations--not to mention the unintended consequences of yet another largely unread law, in addition to the 2,000-plus-pages of health regulations passed in March. What in this scenario could encourage business investment or investor confidence in the future of business, not to mention faith that it will lead to new jobs?

However, job creation is sure to come from the government sector. For example, U.S. Securities and Exchange Commissioner Mary Schapiro said her agency would need to hire 800 people to handle its additional watchdog responsibilities detailed in the new regulations. You can read about some key details of the bill in an article in this issue by Cady North, manager of Government Affairs for FEI in Washington, D.C., and liaison to FEI's Committee on Corporate Treasury.

Those in the Obama Administration and Congress who voted "yes" are cheering this financial reform as a big victory and saying that it will prevent another financial crisis. Here, too, I see it otherwise, and don't believe it addresses much of what caused the crisis.

In fact, the vastness and complexity of today's businesses and global financial markets combined with the very risk-taking nature of Wall Street is likely to continue to encourage the pursuit of more complex financial...