“By Presidential decree, I, Barack Obama, hereby proclaim that no citizen of the United States of America may spend a single dollar of his/her money without my consent and approval.  Some of you may be wondering why we have to do this.  The answer is very simple.  Too many of you have been spending money on applesauce, and I don’t completely understand applesauce, so no one will be allowed to purchase anything at all.”  Scary thought, isn’t it?  Well ladies and gentlemen, that is what the latest Senate “reforms” are out to do with the Volcker rule, an outright ban of proprietary trading.

Proprietary (“prop”) trading is a term used in banking to describe when a firm's traders actively trade stocks, bonds, currencies, commodities, their derivatives or other financial instruments with its own money as opposed to its customers' money.  Why would a firm do this?  Well, the same reason you would invest in the market – to make a profit.  The sheer idea of banning prop trading is one of the most preposterous things that anyone on Wall Street has ever heard.  To you commoners, it might seem very complicated, and being such, you have put your faith in Congress to sort through the mess and tell you what is good and bad for you (in Economics, we call this outsourcing…kind of like what you do when you call the mechanic to fix your private jet).  Well good people of America, you’ve been hoodwinked.  You see, Congress doesn’t understand it any more than you and instead of trying to understand what is going on, they have decided to ban it outright.  If your lawmakers in Congress were to tell you that you weren’t allowed to invest your savings, you’d probably tell them to take a hike, right?  Of course you would.

Yes, there are conflicts of interest that can arise from prop trading, but there are security measures in place to prevent that from happening.  Do people break the rules sometimes?  Sure!  But just because your drunk uncle Larry keeps spending all his money on-what is it that you people drink- Pabst Blue Ribbon, doesn’t mean the government should dictate how you spend yours.   Uncle Larry will drink himself to death, or he’ll be broke and living on the street.  Doesn’t sit well with you? Fine, deal with his alcoholism, not his spending habits.

The good news is, it looks like the Volcker rule is facing some stiff opposition from some members of Congress and Wall Street alike.  I’m just shocked that some elected officials even thought of this idea in the first place.  Then again, look at Arizona.