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After spending more than a year designing a complex piece of legislation to reform Wall Street, the House of Representatives last week passed a roughly 2000 page bill creating, among other things, a Consumer Financial Protection Bureau. While the Senate rejected an amendment to break up the biggest banks, it does seek to push failing banks into a orderly bankruptcy process. The bill also does not force a separation between investment banking and commercial banking, and instead relies on regulation of what’s called “proprietary trading.” While the bill is extensive, it also leaves hundreds of details for federal regulators to flesh out once passed. After freshman Republican Senator Scott Brown balked at a $19 billion tax on big banks and hedge funds to pay for the regulations, Senator Chris Dodd and Representative Barney Frank cobbled together an alternative solution, redirecting $11 billion in federal bailout funds to pay for it. The bill now heads to the Senate this week for a final vote. Meanwhile, Congress has failed to pass any new legislation that would provide significant economic aid to unemployed individuals and cash-strapped states. In June more than a million people lost their unemployment benefits because Republicans refused to approve an extension. And they are blocking efforts to provide emergency funds to states that will be forced to drastically cut services and lay-off hundreds of thousands of employees. Publicly, Republicans argue that unemployment stops recipients from taking jobs, and other forms of stimulus add too much to the federal debt. But, since Republican actions are not creating jobs or stimulating the economy, according to my guest Dean Baker, their motivation seems to be purely political. Higher unemployment is likely to turn voter anger towards Democrats, the majority party.

GUEST: Dean Baker is the co-Director of the Center for Economic and Policy Research (CEPR), author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer, and his most recent, Plunder and Blunder: The Rise and Fall of The Bubble Economy. He also has a blog, “Beat the Press,” where he discusses the media’s coverage of economic issues.