Financial system reform

Bank debate stalls in Senate as industry polishes image - As Wall Street braces for an epic political battle, it is difficult to exaggerate either what is at stake or how battered is the financial industry's public image. Almost three years after the first financial tremors, the strongest impetus behind reforming a crisis-prone system is public outrage about the behavior of the nation's largest financial institutions. More than two-thirds of the public last month held a somewhat or very unfavorable view of the nation's big banks, according to a Pew Financial Reform Project poll.

http://www.usatoday.com/money/industries/banking/2010-04-27-financialregulation27_CV_N.htm

This is another case of Washington making things more complicated than they need to be, in order to pay back campaign donors and shake down prospective donors for more money.

Why not enact a short and simple law: (1) limiting the percentage of any one economic segment which any one company can have (if no one is too big, no one can be "too big to fail"); and (2) limiting the deductibility of executive compensation to a multiple of the lowest paid employee's salary (so that taxpayers no longer effectively subsidize hundred million dollar salaries)?

Of course, this would be too easy, and there would be no political theatre. Plus, threatening systemic reform and establishing a new bureaucracy makes you rich and creates jobs for your supporters.