Congress and the Whitehouse are moving forward with Wall Street Reform and it's about damn time. There is going to be a lot of misinformation flying around on news networks (like Fox), so once per day I'm going to post here the Fact/Fiction talking points from the Whitehouse. Larry Lindsey, a former Bush appointee and a former Enron consultant, put out a memo with anti-reform talking points, so the Whitehouse put out a counter-anti-reform talking points memo.

FICTION:

Lindsey Memo: "To date, public attention has focused on whether the bill is a "bailout" bill that will keep "too big to fail" alive. You be the judge. First, the bill contains a $50 billion fund for resolution of systemically risky institutions."

FACT:

Nobody made that argument until Wall Street lobbyists decided that it was the best way to kill financial reform. The most important principle is that large financial firms - not the taxpayers - bear any costs associated with the failure of another large financial firm. Chairman Dodd's bill meets that test. If a big financial firm fails, it is put into receivership, its shareholders are wiped out, its creditors are allowed to suffer losses, its management is fired. Taxpayers are completely protected.

I'm going to try to get my hands on the current legislation and give it a read. There was a provision I heard Chris Dodd talking about on MSNBC that sounded WONDERFUL to me and I want to make sure it's still in the Bill. The provision was a guard against Too Big To Fail such that companies would have to alert the government (as well as a govt agency monitoring companies) when they reach Too Big To Fail status. No company is eligible for a bailout unless they are registered as TBTF, but when you register as TBTF then it starts a 1 year countdown. Within that 1 year, your TBTF company has to be broken into smaller companies that are no longer TBTF so that if one arm of the company goes down in flames it won't hurt the country. It sounds reasonable and fairly elegant to me!