As we all know, lawmakers do not always get it right when they draft and support new financial laws. However, as this Forbes.com article shows, some times the bills they pass are so ridiculous that it is surprising they ever become law. In a new “Gallery of Pain,” Forbes.com has collected a slideshow of the dumbest financial laws of all time. You can find the text regarding some of the laws included in their list below, but be sure to view the slideshow at Forbes.com.
How worried should the world be about the new regulatory reform bill wending its way through the U.S. Congress? Given the country's track record on looking after the financial services industry, the answer is: plenty worried.
Even the staunchest believers in free enterprise would agree that a modicum of regulation is necessary for a functioning economy. The new bill, which Congress aims to get on President Obama's desk before the July recess, looks to be chock full of ways to ward off yet another financial crisis. These include: audits of the Federal Reserve; the dismantling of lucrative banking divisions devoted to crafting and trading complex securities called derivatives; an agency that would take quick control of troubled financial institutions; and the so-called Volcker rule, after former Federal Reserve chairman Paul Volcker, that would prohibit banks from making speculative trades with depositors' money.
Whatever ideas end up on the books, three things are certain.
First, regulation--no matter how well intended--comes with a whole heap of unintended consequences. Some laws have invited, or at least exacerbated, full-blown financial crises. (For a round-up of the most ill-fated legislation, see our slide show.) "Regulations are fixed in time and can't adapt," says David Weiman, a professor of economics history at Barnard College.