Obama and financial reform
June 21st 2009 06:10
Last week, Barack Obama proposed reforms for the financial sector of our economy:
I haven't looked that closely at the details of Obama's plan, but I am very much in favor of increased regulation of financial companies. We have to do everything we can to avoid another meltdown like the one we had last fall. Over the last few years, regulations were either absent or unenforced, and Wall Street ran wild. They were playing Russian roulette with house money. Unfortunately, their house money came from the investments and retirement plans of average Americans like you and me. When the gun went off, it took the entire country down.
This is a familiar pattern. We deregulate until the pendulum swings too far in that direction. Then we recalibrate and swing the pendulum back the other way. I wish we could trust financial firms to self-regulate, but it's clear that we can't. When they are turned loose without any substantive constraints, they endanger us all. We have to impose tighter controls and prevent such displays of wanton recklessness.
President Barack Obama urged policy makers to rewrite the rules governing U.S. finance, unveiling far-reaching proposals that would affect nearly every aspect of banking and markets.
The White House hopes Congress can complete work on the plan by year's end. But it is sure to face opposition both from some on the right who say it threatens to throttle free markets and others on the left who say it doesn't go far enough. Some in Congress are cautioning against haste.
The White House hopes Congress can complete work on the plan by year's end. But it is sure to face opposition both from some on the right who say it threatens to throttle free markets and others on the left who say it doesn't go far enough. Some in Congress are cautioning against haste.
I haven't looked that closely at the details of Obama's plan, but I am very much in favor of increased regulation of financial companies. We have to do everything we can to avoid another meltdown like the one we had last fall. Over the last few years, regulations were either absent or unenforced, and Wall Street ran wild. They were playing Russian roulette with house money. Unfortunately, their house money came from the investments and retirement plans of average Americans like you and me. When the gun went off, it took the entire country down.
This is a familiar pattern. We deregulate until the pendulum swings too far in that direction. Then we recalibrate and swing the pendulum back the other way. I wish we could trust financial firms to self-regulate, but it's clear that we can't. When they are turned loose without any substantive constraints, they endanger us all. We have to impose tighter controls and prevent such displays of wanton recklessness.
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Comment by Lester Caudill
Round Politics
Comment by rickb_georgia
Why does this administration make me think of Chicago during the days of Al Capone?
Comment by PopulistConservative
Angry Electorate
Comment by PopulistConservative
Angry Electorate
Comment by Someone
Evil Pleasures
Random Musings on Life, Love and Everything
Let's Get Down To Business
At present, the companies that really caused this mess are partly or wholly government owned... which means the government is free to restructure them as they see fit. However, there are a whole bunch of firms that are perfectly healthy, which are acting responsibly, but would be additionally burdened by additional regulation. Sure, the default-swap bubble was an oversight and a formalized trading scheme was needed... but wouldn't anything outside of that be unfair for healthy firms?
Comment by rickb_georgia
Comment by PopulistConservative
Angry Electorate
But they won't always be owned by the government. At least, I hope they won't. There need to be regulations to hold them in check once they re-emerge from government ownership.
As long as they're not onerous, then I don't see anything wrong with regulations. Regulations are just rules. There are thousands of rules in place now for the financial industry. These new rules will just (hopefully) prevent those companies from taking irresponsible risks that could jeopardize the industry and/or the economy.
Comment by PopulistConservative
Angry Electorate