Money doesn't actually talk. We do.

Paulson’s Passion: “Let’s go Dutch.”

According to the Blueprint for Stronger Regulatory Structure, fresh from the steaming hot presses of the U.S. Treasury, the era of financial market band-aids is over.

On Monday morning, Treasury Secretary Henry Paulson revealed an overarching plan for straightening up mortgage lending, consolidating banking and securities oversight, as well as establishing “optional” federal monitoring of insurance.

In the past, when corporations or individuals caused a financial scrape, Congress and batallions of state and federal regulators would litigate, point fingers and foist reactionary legal restrictions on a system that had already moved on to the next shell game.

This time, Paulson, along with trotting out the usual quick-fixes, admits that the objective-based regulatory frameworks in The Netherlands and Australia are superior to the United States system of industry and/or state-based oversight. (Think The Night Watch meets boxing kangaroos.)

What is objective-based regulation, you ask? The long-term goal is to create three distinct regulators entrusted with ensuring 1984-like “stability”, “prudence” and “conduct.” These are amazingly lofty goals for an adminstrator/administration on its last legs.

What this means for everyday consumers is, I’m afraid, very little.

Scrutiny of mortgage brokers and lenders is a few years late. And, following late 1990s legislation, it was only a matter of time before the Federal Reserve welcomed investment banks to credit heretofore reserved for commercial banks. And the last concern–too many regulators trying to do the same job–has allowed ambitious lawyers, journalists and private citizens to clamor about misdeeds and injustices from the bottom up.

The fact is, the only thing consolidation of regulatory power in Washington (a certified top-down town) may bring us closer to is the Ministry of Truth.

– Ari Weinberg