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What is the real cost of the financial industry overhaul? A further blow to the credibility of President Obama and the leaders of Congress.

Recent polls have shown that Americans have little confidence in the ability of the new bill to rein in the practices which led to the near-collapse of our financial system.

Since the bill all but ignores the core issue that brought on the chaos – a misguided housing policy and the reckless implementation of that policy through Fannie Mae and Freddie Mac -- their skepticism is well founded.

Americans are not stupid.

Assurances from Obama that the bill will prevent another financial crisis “by protecting consumers against the unfair practices of credit card companies and mortgage lenders” ring as true as his promise that we could provide free health care to 31 million Americans and save money at the same time.

Americans know this bill is among the worst ever crafted. Where industry is crying out for resolution, it leaves yawning chasms of uncertainty – requiring 243 future rule makings and 67 studies.

No one doubts that whatever rigor was originally written into the bill will be diluted by the bickering and lobbying yet to come.

They do not believe Congressman Barney Frank (D-Mass.), who crowed that public opinion drove its creation as “it blew away the lobbyists, the money, the campaign contributions.”

Move the spotlights elsewhere- to the utilities perhaps, or the oil sector – and any zeal to corral Wall Street’s most dangerous practices will evaporate.

If indeed, Congress even understands what those practices were. How confident are we in our regulators when they can’t even explain why our stock market mysteriously sank 1,000 points in a nanosecond just weeks ago? Does the SEC really have its arms around flash trading, dark pools and the like?

More important, as bank analyst Dick Bove has made clear, the financial overhaul bill is likely to constrict credit and restrict the money supply – a damaging fall-out already visible from the Credit Card Act passed in 2009. (Remember that we just passed a major overhaul of credit card rules – one wonders why we have to do it again.) Bove maintains that the bill reflects little understanding of the way banking works; he especially notes its failure to address the primary cause of the credit collapse – poor underwriting standards.

Is the entire bill a waste of time? No -- there are elements, such as tightening reserve and capital requirements and changing the manner in which derivatives are traded, that are worthwhile.

However, we didn’t need a giant bill to embrace such measures. Nor did we need 2,000 pages to alert our financial regulators that their job was to head off financial crises.

The Fed has always had that responsibility – but hasn’t had the ability or the will to jump into the bubbling soup.

Now, instead of the Fed having that job, we have a whole council keeping watch over the ramparts. I would love to overhear their future debates.

Who will it be, the next time housing prices soar or oil prices scoot through $100, that will step in to squash homeowner equity, or the winnings of public pension funds that have invested in commodity markets? It will never happen.

Instead of making our financial police more agile, to deal with fast-changing markets, we have almost guaranteed paralysis.

In any case, President Obama and Congress continue to miss the Big Point. Americans want them to focus on creating jobs – not to redo how our health care industries function, not to spend months on financial legislation that few have read and even fewer understand.

Democrats in Congress and President Obama are on a kamikaze run. They know best. They are sure that passing these sweeping, historic bills (as they are described by their champions – words that instinctively make most Americans shudder) is the way to lift the country out of the doldrums. They are wrong.

Instead of uniting the country in a battle to revive our industries and commerce, Obama has created one division after another, leading to sinking confidence and a foundering economy.

Elsewhere in the developed world, governments have sought to regain the trust of their constituents by exhibiting fiscal prudence and by promoting the private sector.

Polls across Europe show emerging optimism. It is remarkable that the new leadership in England has successfully proposed harsh remedies for that country’s budget mess, and has seen its popularity rise.

Britain's David Cameron has brought business leaders into his government to make his ministries more efficient and to strategize over spending cuts (his words, not mine.) This collaboration has bucked up a country that is angry at bankers but is also fairly sure the private sector has better answers than its politicians.

The president needs to step down from his lofty perch. He needs to engage the business community in a meaningful way – not for photo-ops but for the health of the country.

He needs to provide the private sector with every tool imaginable – as every other government is doing – to expand production and especially exports.

He also needs to reassure Americans that he is serious about restoring fiscal sobriety. Instead of pressing for yet another extension of unemployment benefits as he did on Monday, let’s focus on providing jobs.

It is ironic that the president continues to hammer Wall Street for its reckless behavior, while managing the country in similar fashion.

Liz Peek is a financial, political and social columnist. She is a frequent contributor to the Fox Forum. For more, visit LizPeek.com.

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