ERIC CHESLEY: The country is at a crossroads and it’s time to make a choice. Choice A is that we grant the federal government greater power to control financial institutions in the hope that the feds posses the clairvoyance to see a meltdown coming and take appropriate action to prevent a crisis. Choice B is that we demand that the federal government restrain itself and allow financial companies that are “too big to fail” to do just that, fail. In the short term the choice appears simple, if failure can be prevented, why not do something about it? That’s the position Sen. Chris Dodd has taken with his financial reform bill “Restoring American Financial Stability Act of 2010.”

There seems to be bipartisan agreement that financial reform is needed, but Sen. Dodd’s attempt at reform misses the mark. Sen. Dodd’s bill includes a $50 billion bailout fund for big Wall Street firms, awarding some of those who created the problem in the first place. It creates yet another bureaucracy, the Consumer Financial Protection Agency that would duplicate existing regulatory agencies. And the bill puts a restriction on derivatives that are blamed for last year’s financial crisis, and, as a result of restricting derivatives, U.S. companies probably will seek foreign investment opportunities and moving capital outside of the U.S. But the most worrisome provision of the bill is found in Subtitle B Section 151-156 that creates the Office of Financial Research.

On its face, the new entity sounds rather benign. What is the threat of a federal agency doing a little financial research? The threat lies in the fact that this new office will have the authority to dig into any financial transaction that they like.

Karl Rove shed some light on this proposed agency while appearing on Fox news. He points out that the bill creates a super-regulatory agency with too much power:

It creates a new office and gives it a half a billion dollars a year and a huge start-up for computer systems in order to monitor every financial transaction in the United States and to use that data to arrive at policy recommendations about sensible regulation.

So they’re literally going to have the capacity to go through everybody’s brokerage account and everybody’s checking account and everybody’s credit card and everybody’s financial transactions and collect – sweep that information and then analyze it. Karl Rove, Fox News

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