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.

So Dodd-Frank does not remedy the fundamental cause of the economic meltdown of 2008, which was the government's decision to shift the costs of bad investment decisions from corporate executives to taxpayers. Nor does the bill do anything to remove the elephant in the living room, the Fannie Mae/Freddie Mac bailout. The costs of this will reach nearly $400 billion, according to the Congressional Budget Office, and could approach $1 trillion before all is said and done. Roughly 70 percent of all U.S. mortgages are held by Fannie and Freddie, which between them hold $5 trillion in their investment portfolios. Fannie and Freddie are still losing billions by the month on bad mortgage investments and taxpayers are still on the hook. This means the housing crisis is far from being resolved, and, thanks to the continuing high rate of foreclosures, could plunge the economy back into recession at any time. No wonder four out of five Americans, according to a recent Bloomberg News survey, believe the reform bill Obama hailed as historic is anything but."

http://www.washingtonexaminer.com/opinion/Wall-Street-reform-that-isn_t-1001080-98624969.html