Our guest blogger is Adam Hersh, an economist at the Center for American Progress Action Fund.

In an op-ed in today’s Financial Times, former Federal Reserve Chairman Alan Greenspan proffers a back-handed criticism of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Financial markets are too complex to regulate the way the supporters of Dodd-Frank want, and those markets basically efficient and stable anyway, the Maestro tells us:

The financial system on which Dodd-Frank is being imposed is far more complex than the lawmakers, and even most regulators, apparently contemplate. We will almost certainly end up with a number of regulatory inconsistencies whose consequences cannot be readily anticipated. Early returns on the restructuring do not bode well.

As shepherd of the US financial system from 1987 to 2006, Greenspan presided over development of the two largest speculative financial bubbles in the history of the world: the high-tech bubble of the 1990s and the real estate bubble of the 2000s. All the while, Greenspan championed the removal of any regulatory obstacles to Wall Street getting what Wall Street wants.

In retrospect, it is obvious how both Greenspan bubbles have been terribly detrimental to the US economy and the livelihoods of hundreds of millions of families here and around the world. But it was perfectly obvious to many even before the fact that the bubbles would threaten economic meltdowns, disrupting economic growth and destroying jobs, wealth, and the lives of people who had nothing to do with the financial largesse but were nonetheless swept up in the economic wreckage. Either the Maestro didn’t understand what risks an overblown, unbridled financial system posed, or he was a grossly negligent policymaker leading the world’s most important central bank.

Now Greenspan is warning that Dodd-Frank might put finance at risk because lawmakers don’t understand the complexity of the financial system they are trying to regulate. And besides, financial markets aren’t so bad:

With notably rare exceptions (2008, for example), the global “invisible hand” has created relatively stable exchange rates, interest rates, prices, and wage rates.

Thanks for the advice Maestro, but no thanks. Actually, it is well understood in the economics research that exchange rates and other financial indicators are less stable now in the age of Greenspan and financial deregulation than in previous decades, and that financial liberalization shoulders much of the blame for this development. As for stable prices and wages, we can thank conservative economic policies (pursued by Greenspan and others) promoting wage stagnation.

By Pat Garofalo and Igor Volsky

The ongoing budget negotiations between the House Republican leadership and Senate Democrats has broken down, as Republicans continue to insist that their spending bill — H.R. 1 — “serve as a starting point for all negotiations.” House Republicans “have demanded everything: not just some of their cuts but almost all of them, and not just a reduction in spending but a reduction only in the programs they don’t like,” the New York Times notes today. In fact, many are “insisting Democrats also agree to nonbudgetary riders, like ending the financing of Planned Parenthood or health care reform.”

But a closer examination of the at least 81 riders from OMB Watch reveals that many would have the opposite of the GOP’s intended effect and actually increase federal spending. For instance, a CBO analysis of Sec. 4017 of H.R. 1 — which would strip funding for any provisions in the Affordable Care Act — argues that partially defunding the law increases costs “by $3.1 billion in fiscal year 2012 and by smaller amounts in each of the fiscal years 2013 through 2021.” The same may be true for the following riders:

Sec. 4013 — Prohibits funds to the Planned Parenthood Federation of America: Planned parenthood provides services more efficiently and each dollar spent on contraception saves taxpayers multiple dollars down the line. For instance, it’s estimated that pushing contraceptive care patients from Planned Parenthood to other clinics would “cost the government an additional $174 million a year.”

Sec. 1591 — Prohibits funding for needle exchange programs: As an example, the cost to prevent a single HIV infection by needle exchange “has been calculated at $4,000 to $12,000, considerably less than the estimated $190,000 (listed in 1997 dollars) medical costs of treating a person infected with HIV.”

Sec. 4020 — Prohibits funds to take any action to effect or implement the disestablishment, closure or realignment of the US Joint Forces Command: Closing the Joint Forces Command, which “employs more contractors than troops” and which Defense Secretary Gates says is no longer necessary, could save up to $240 million per year.

Sec. 4051 — Prohibits funds for implementing a provision specific to the State of Texas in the “Education Job Fund”: This provision prevents Texas from collecting money from the education jobs bill passed last year unless it maintains its own rate of current education funding. Gov. Rick Perry (R-TX) has previously stuck federal education money into his state’s Rainy Day Fund. Blocking the provision amounts to giving Texas more than $800 million with no oversight.

Sec. 4012 — Bans funding for the Department of Education regulations on Gainful Employment: These regulations would restrict federal funding for subprime schools, many of which make 90 percent of their revenue from the federal government, while accounting for nearly half of student loan defaults.

Earlier this month, Senate Appropriations Committee Chairman Tom Harkin (D-IA) insisted that riders would not be part of a budgetary agreement. “[W]e’re not going to have any riders,” Harkin told Politico. “So, that’s just not going to happen. It won’t be part of the deal.”

House Transportation Committee Chairman John Mica (R-FL)

The House this week will vote on a bill reauthorizing the Federal Aviation Administration. The FAA has been acting without a full authorization for more than three years (and through 18 continuing resolutions). However, inserted into a bill dealing with flights into D.C.’s national airport and upgrades of air traffic control facilities is an anti-union provision meant to prevent workers from exercising their right to organize.

The provision, backed by House Transportation Committee Chairman John Mica (R-FL), would reverse a ruling by the National Mediation Board that did away with the absurd practice of counting workers who didn’t vote in union elections as having voted against the union. Since the NMB’s ruling, workers who don’t vote in union elections are simply not counted at all, just like voters who choose not to vote in elections for local, state, or federal governments.

Why would Mica want to reverse a ruling that treats union elections like any other election, including those for Congress? Perhaps because he has received far more money from transportation companies — which would desperately like to see the NMB’s ruling reversed — than from any other group in his career, according to the Center for Responsive Politics:

FedEx — which is fighting the NMB’s change tooth and nail — is one of Mica’s highest contributors. (FedEX CEO Fred Smith has said that “I don’t intend to recognize any unions at Federal Express.”) Delta is also lobbying heavily for the Republican-backed provision, even “forgoing selling seats to paying customers to fly their employees — contra stated corporate policy — to DC to lobby.”

Under the old rules, corporations were able to game union elections by including the names of former employees (some of whom were dead) on their employment rolls; of course, these employees didn’t vote and thus were counted as voting against unionization. And if the rules Mica wants to reinstate for union elections were applied to his own election, he would have lost handily:

Rep. Mica received support from 69% of the voters in his district who cast a ballot in his successful 2010 re-election campaign, amounting to slightly over 185,000 actual votes tallied for him. However, if you add the over 83,000 voters who voted against Rep. Mica to 312,000 eligible voters who did not participate, then Rep. Mica would only muster 32% of the overall total — falling far short of the majority needed for election. Rep. Mica would lose handily to the 68% of “voters” who chose his opponent or were non-participating voters whose absence was counted as a vote for the alternative.

This is a pretty clear case of Republicans doing the bidding of corporations, with no real policy rationale behind their legislation. Incidentally, Mica’s chief of staff recently left to become a lobbyist for the transportation industry.