Two House committees this week approved derivatives legislation that composes a significant part of the Obama Administration’s Financial Services reform plan. Remarkably, for a plan crafted significantly by uber-liberal Barney Frank (Chairman of the House Financial Services Committee), the bill is notably less bad than the Administration’s original proposal, but still is flawed. The House Agriculture Committee also added amendments to the bill. Heritage noted before that derivatives market participants are rapidly changing their business practices and structures in a voluntary, cooperative effort, albeit under government sponsorship. The biggest danger …
Heritage scholars JD Foster and David John react to this weekend’s Wall Street turmoil: While unfortunate for both Lehman and Merrill Lynch, what is most important about these transactions is that markets are in one important sense returning to a normal order even in the face of uncertainty and turmoil: One firm filed for bankruptcy; another is sold; no direct government financial involvement. Other points from the Heritage domestic policy team: In our economic system, failed firms go bankrupt. It’s unfortunate, but necessary to future prosperity. In our system, firms …
