Wall Street shows the economy is recovering. Congress doesn't like it.

If you haven’t been following the stock market over the past year out of fear of your portfolio and 401(k) continuing to lose value, then you may not have noticed that the Dow is up 1,800 points since this time last year. Of course, the year-to-year difference masks the 3,900-point swing from when the market bottomed out in March. It also hides the fact that unemployment climbed up to the double-digit range as well. Still, Wall Street continues to be a good indicator of where our economy is and where it is headed. So why does Congress hate Wall Street so much?

Well, “hate” is a strong word, but they really do want to put the screws to the powerful investment businesses that exist on Wall Street. The House has drafted and passed the Wall Street Reform and Consumer Protection Act, designed to create a watchdog organization to keep track of financial institutions. The Act would form the Consumer Financial Protection Agency who will oversee transactions such as mortgages, car loans, credit cards, and other monetary transactions. Their hope is to stem off any future financial meltdowns resulting from the lack of regulations on Wall Street.

As a person who has a loan, contributes to his 401(k) plan, and trades stocks and mutual funds, knowing someone is looking out for me as a bit of comfort and reassurance to my financial well-being. And unlike many of the bills coming out of Congress this year, this bill might actually benefit the nation financially in the long run. Knowing that their buying and selling of debt is being watched, the financial sector might be less likely to participate in risky debt transactions. However, I do believe that the burden for protecting the consumer still falls on the consumer him/herself.

Before taking on new debt, the consumer should do their research and make sure they can afford it. For example, if you are going to buy a house, you would search out the best type of loan for your situation, examining not only how much the mortgage would cost year each month but also all the utilities. If you plan on investing in the stock market, you would do your research on the companies and fund managers before using a broker, an options trading system, or an online investing site. You can’t expect the government to always be there to bail you out if you get in financial trouble.

That last point is what I think this bill is all about. Congress isn’t as concerned about the consumer’s risk as it is the influence and practices companies on Wall Street use. If more regulation can avoid another controversial issue such as bailing out AIG or taking over General Motors, the politicians will be in favor of it. The Wall Street Reform and Consumer Protection Act passed in the House by a margin of only 21 votes. If the Senate takes up the bill, narrows the scope, and works on forming and passing a compromise bill with the House, these new regulations could go a long way to stabilizing the markets. But no matter how much oversight the government has, the responsibility still falls on your shoulders. Be money-wise, and don’t live beyond your means.